HomeMy WebLinkAbout06-04-2019 Item 15 - Update to Wastewater Development Impact Fees
Department Name: Utilities
Cost Center: 6002
For Agenda of: June 4, 2019
Placement: Business Item
Estimated Time: 30 minutes
FROM: Aaron Floyd, Utilities Director
Prepared By: David Hix, Deputy Director - Wastewater
Jennifer Metz, Utilities Projects Manager
SUBJECT: UPDATE TO WASTEWATER DEVELOPMENT IMPACT FEES
RECOMMENDATION
Adopt a resolution (Attachment C) entitled “A Resolution of the City Council of the City of San
Luis Obispo, California, Amending the City’s Wastewater Development Impact Fees.”
DISCUSSION
The purpose of this item is to align the City’s Wastewater Fee program with the “one family”
policy approach. The Council adopted the City’s existing wastewater development impact fees in
Spring 2018, effective July 1, 2018, as part of a comprehensive AB 1600 fee update (Attachment
A). The methodology used for the adopted fees includes costs of sewer lift stations in the citywide
wastewater development impact fee with the exception of the Buckley Sewer Lift Station.
In February 2019, the City was provided with cost information for the Buckley Sewer Lift
Station from Avila Ranch, LLC. The Buckley Sewer Lift Station is proposed to serve the Avila
Ranch residential development with up to 720 units on a 150-acre site north of Buckley Road.
The Buckley Sewer Lift Station would also serve future development east and west of the Avila
Ranch project within the boundaries of the Airport Area Specific Plan. Following construction
by Avila Ranch and acceptance by the City, the Buckley Sewer Lift Station would be the ninth
public sewer lift station. It is consistent with the City’s methodology to include the costs of the
Buckley Sewer Lift Station in the City’s wastewater development impact fee.
Total construction cost for the Buckley Sewer Lift Station is $1,594,759, with $1,414,759 subject
to a reimbursement agreement with Avila Ranch, LLC and $180,000 budgeted for City
construction management and inspection services. The City contracted with HDR to update the
wastewater development impact fee with the construction and inspection cost of the Buckley
Sewer Lift Station identified in the City’s capital improvement plan (Attachment B).
The applicant and the City realized that the adopted program excluded the Buckley Sewer Lift
Station yet required them to both build it and pay all applicable Wastewater Fees. Essentially, the
approach would require them to pay for both the regional lift stations that do not serve them and
the proposed station that would directly benefit and serve Avila Ranch. Based on this discovery,
Staff agreed to recommend to incorporate the Buckley Sewer Lift Station into the fee program.
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Lift station installation
Current 2018-19 Development Impact Fee Proposed Development Impact Fee
Total Wastewater
Fee Program (2018-19)
Per Equivalent
Dwelling Unit (EDU)
Total Wastewater
Fee Program
(2019-20)
Increase from 2018-
19 Fee Program Per EDU
Wastewater $62.4 million1 $10,721 $64 million1 +$1,594,759 $11,0262
NOTES
1. Figures are rounded.
2. By Resolution, development impact fees are adjusted on July 1 of each year by. U.S. Bureau of Labor Statistics
consumer price index for all urban consumers (CPI-U).
The proposed $305 per equivalent dwelling unit increase is approximately three percent of the
existing wastewater development impact fee. Staff recommends Council adopt the Resolution
(Attachment C), which includes the full wastewater development impact fee schedule. The
proposed effective date for the updated fees is June 5, 2019.
Mitigation Fee Act
The Mitigation Fee Act (Assembly Bill 1600, or AB 1600) is contained in California
Government Code Section 66000 et.seq., established constitutional limits and “ground rules” for
the imposition and administration of impact fee programs. AB 1600 became law in January 1988
and requires local governments to document the following when adopting an impact fee:
1. Identify the purpose of the fee;
2. Identify the use of the fee revenues;
3. Determine a reasonable relationship between the use
of the fee and the type of development paying the fee;
4. Determine a reasonable relationship between the need
for the fee and the type of development paying the
fee; and
5. Determine a reasonable relationship between the
amount of the fee and the cost of the facility
attributable to development paying the fee.
In summary, a fee cannot collect more than the cost of the
public facility needed to accommodate the new
development paying the fee. AB 1600 establishes the
legal requirement for there to be a nexus between the
project and fee. In addition, fee revenues can only be used
for their intended purpose.
Policy Context
The City updates its development impact fees, consistent
with General Plan, Water and Wastewater Management
Element, and other policies related to the provision of
wastewater service.
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Public Outreach
City staff presented the updated wastewater development impact fees at the Developers
Roundtable meeting on May 13, 2019 which was well attended by a variety of representatives
from the development community. No concerns were expressed by those in attendance at the
meeting.
CONCURRENCES
Community Development concurs with the environmental review findings, below.
ENVIRONMENTAL REVIEW
Adoption of the proposed Resolution is not a "project" under the California Environmental
Quality Act (CEQA), because the action does not involve any commitment to a specific project
which may result in a potentially significant physical impact on the environment, as
contemplated by Title 14, California Code of Regulations, Section 15378.
FISCAL IMPACT
Budgeted: No Budget Year: FY 18-19
Funding Identified: Yes
Fiscal Analysis:
Funding Sources Current FY Cost Annualized
On-going Cost Total Project Cost
General Fund
State
Federal
Fees
Other: Sewer Fund $9,950 N/A $9,950
Total $9,950 N/A $9,950
There is no fiscal impact associated with the recommended action on the City’s Sewer Fund. The
City’s contract with HDR Engineering, Inc. to prepare the update to the wastewater impact fee
was $9,950. This was paid from the City’s Sewer Fund, Wastewater Administration and
Engineering operating program budget.
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ALTERNATIVE
The City Council could elect not to approve the updated of the wastewater development impact
fees at this time and provide direction to staff to make modifications to the fees. Staff does not
recommend this alternative, as the update was prepared consistent with the City’s approach
through which the cost of sewer lift stations would be collected across the City.
Attachments:
a - 4-3-2018 Fee Program CAR
b - HDR WW Dev Impact Fee Update 5_10_2019
c - Resolution Amending the City's Wastewater Development Impact Fees
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Meeting Date: 4/3/2018
FROM: Michael Codron, Community Development Director
Prepared By: Xzandrea Fowler, Community Development Deputy Director
SUBJECT: CAPITAL FACILITIES FEE PROGRAM UPDATE/NEXUS STUDY (AB 1600)
ORDINANCE INTRODUCTION AND WATER AND WASTEWATER
DEVELOPMENT IMPACT FEE PROGRAM
RECOMMENDATION
1. Receive a presentation on the Capital Facilities Fee Program Nexus Study, which identifies
various infrastructure projects associated with transportation, parkland and park
improvements, police, fire, and general government facilities, and calculates new
development’s fair share of the cost of these facilities; and
2. Consider recommended policy adjustments to reduce the fair share for new development to
ensure the feasibility of various development types, including multi -family and smaller
single-family units; and
3. Introduce an Ordinance and Resolution to adopt and implement the recommended Capital
Facilities Fee Program; and
4. Adopt a Resolution to adopt and implement the recommended Water and Wastewater
Development Impact Fee Program.
REPORT-IN-BRIEF
This project is an important implementation item for the 2014 Land Use and Circulation Element
update and accomplishes key action items identified in the Major City Goals for Fiscal Health
and Responsibility, and Housing Production. This report and accompanying documentation
includes the necessary analysis and studies to substantiate revisions and additions to the City’s
current development impact fees. The nexus studies that have been prepared to support the
Capital Facilities Fee Program, and the Water and Wastewater Development Impact Fee
Program, provide the City of San Luis Obispo with the necessary technical documentation to
support the potential adoption of:
1. An updated transportation development impact fee;
2. A modified parks and parkland in-lieu fee;
3. Updated water and wastewater development impact fees; and
4. New general government, police, and fire development impact fees.
The adoption of a revised Capital Facilities Fee Program, and Water and Wastewater
Development Impact Fee Program, and the careful investment of development impact fee
revenues along with other local, State, and Federal sources of funding for infrastructure, will
ensure that adequate infrastructure will be available to support growth of the City as envisioned
in the General Plan and enhance quality of life for existing residents.
In total, the projects included in the Nexus Study will cost $360 million to deliver (excluding
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cost associated with parkland acquisition and improvement projects that will be identified in the
update of the Parks and Recreation Element/Master Plan). Of this total, $209 million is identified
as the maximum amount that could be recovered through impact fees, consistent with the
requirements of AB 1600. As illustrated in the following table, the gap between the “Total Cost”
and the “Reduction Strategy CFFP Revenue” (equal to $214 million) will require funding from
other sources (grant, regional, General Fund) and is not currently included in General Fund long-
range forecast projections. The proposed reduction strategy is intended to ensure development
feasibility, and incentivize smaller, more affordable housing units. The strategy increases the gap
between the total project cost and the available fee revenue to pay for those projects by $63
million.
DISCUSSION
General Plan Policies
The City of San Luis Obispo General Plan, Land Use Element Policy 1.13.9, Costs of Growth,
states the following:
The City shall require the costs of public facilities and services needed for new
development 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 services and facilities which are required to serve the project, and
which are reasonably related to the new growth attributable to the development.
Some of these “costs of growth” are paid for by new development either through the direct
construction of an infrastructure project (such as a roadway or water line needed to serve that
development), or by payment of a development impact fee. During previous study sessions on
this topic, the Council has directed staff not to charge the maximum fees to ensure that
development remains feasible, and to incentivize the construction of smaller, more affordable
housing units. The fee structures recommended have all been evaluated to ensure feasibility, and
are tiered to incentivize smaller, more affordable housing units.
Mitigation Fee Act
The Mitigation Fee Act (Assembly Bill 1600) is contained in California Government Code
Section 66000 et.seq., established constitutional limits and “ground rules” for the imposition and
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TENewspaper of the Central Coast
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SLO CITY CLERK
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In The Superior Court of The State of California
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AD # 3572200
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STATE OF CALIFORNIA
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County of San Luis Obispo
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was, the principal clerk of the printers and publishers of
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Signature of Principal'lerk)
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Cirff OF
SOD, LUIS OBISPO
SAN LUIS OBISPO CITY COUNCIL
NOTICE OF PUBLIC HEARING
Trie San Luis Obispo City Council invites all interested persons to
attend a public hearing on Tuesday, April 3, 2018, at 6:00 p.m.
in the City Hall Council Chamber, 990 Palm Street, San Luis
Obispo, California, relative to the following:
CAPITAL FACILITIES FEE PROGRAMI)PDATE/NE%U$
STT LAE 1800) ORDIHA_.NCE INTRODUCTi N AND WA'rE
AND WASTEWATER OEYELOPMENT IMPACT FEE PROGRAM,
A public hearing to consider the following:
1. Receive a presentation on the final results of the Capital Facili-
ties Fee Program Nexus Study and the Water and Wastewater
Development Fee Program; and
2. Introduce Ordinance to adopt and implement the Capital Facili•
ties Fee Program; and
3. Approve a Resolution to implement the Capital Facilities Fee
Program; and
4. Approve a Resolution to adopt and implement the Water and
Wastewater Development Fee Program; and
5. Receive public input; and
6. Direct staff to return on April 17, 2018 for the second reading
of the Ordinance to adopt and implement the Capital Facilities Fee
Program.
For more information, you are invited to contact Xzandrea Fowler
of the City's Community Development Department at (805) 781-
7274 or by email at g owl Lslq rl grg_
The City Council may also discuss other hearings or business
I ems before or after Ihe. Items Elated above. If you challenge 1h
proposed proiect In court, you may ba limited to raising only those
Muss you or someone else raised at the public hearing descri-
bed In this notice, or in wr$ten correspondence delivered to the
City Council at, or prior to, the public hearing.
Reports for this meeting will be available for review in the City Cler-
k' s Office and online at www.slocity.org on Wednesday, March 28,
2018. Please call the City Clerk's Office at (805) 781-7100 la
more information. The City Council meeting will be televised live
on Charter Cable Channel 20 and live streaming on www.slocity-
9
Teresa Purrington
Acting City Clerk
City of San Luis Obispo
March 17, 24, 2018 3572200
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administration of impact fee programs. The Act became law in January 1988 and requires local
governments to document the following when adopting an impact fee:
1. Identify the purpose of the fee;
2. Identify the use of the fee revenues;
3. Determine a reasonable relationship between the use of the fee and the type of
development paying the fee;
4. Determine a reasonable relationship between the need for the fee and the type of
development paying the fee; and
5. Determine a reasonable relationship between the amount of the fee and the cost of the
facility attributable to development paying the fee.
In summary, a fee cannot collect more than the cost of the public facility needed to accommodate
the new development paying the fee. AB 1600 establishes the legal requirement for there to be a
nexus between the project and fee. In addition, fee revenues can only be used for their intended
purpose.
Previous City Council Direction
On October 17, 2017, the City Council participated in Study Session #1 (Attachment F) to
review and provide direction on the preliminary results of the Capital Facilities Fee Program
Nexus Study. The preliminary results presented during that study session represented the
maximum fees that could be charged to development based on a list of identified
facilities/infrastructure improvements and/or service levels desired, consistent with legal nexus
requirements and fair-share analysis that are necessary to support development through the
buildout of the 2035 General Plan. The Council considered the effect of implementing a
maximum fee program and provided staff with guidance regarding policy considerations that
incorporate analysis of the total fee burden, impacts to affordable housing objectives,
identification of alternative infrastructure funding sources, refinement of the list of identified
transportation and park and recreation facilities/infrastructure improvements.
In response, staff and the consultant team revised preliminary nexus study results and presented
them to the City Council on January 9, 2018 during Study Session #2 (Attachment G). Council
directed staff to evaluate further policy adjustments to ensure feasibility, even if it resulted in a
recommendation to charge less than the maximum fees identified in the Nexus Study, to collapse
the transportation component of the fee program into a single Citywide program “one happy
family”, and to incentivize the development of missing middle housing by reducing the overall
fee burden on the development of small lot single family unit and multi-family residential units.
Provided below is a Table that summarizes how the Transportation Impact Fee component of the
CFF Program has evolved through this process over the course of the last six months. The
recommended fees shown in the previous table reflect the fee reduction strategy that was
developed to address Council direction from the study sessions and feedback from outreach with
the development community and stakeholders.
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Water and Wastewater Capacity and Connection Fees
On October 17, 2017, City Council also considered final adoption of the Water and Wastewater
Capacity and Connection Fees (Attachment I). City Council deferred the adoption of the
proposed fees to better understand the total fee burden on new development.
The October 17, 2017 staff report included a recommendation and three alternatives
Attachment H). Based on Council direction received during the subsequent study session
related to the CFF Study and the total fee burden, Alternative 1 for water and Alternative 3 for
wastewater proposed on October 17, 2017 are now recommended. This change results in the
removal of $22.7 million and $10.9 million of capital infrastructure for water and wastewater
respectively from the fee program placing a greater portion of the capital improvement cost on
water and wastewater ratepayers. Returning to the term “development impact fee” instead of the
term “capacity and connection fee” will best communicate the alternative fee.
Community Outreach
Staff actively engaged with a variety of stakeholders throughout the process, beginni ng with a
Developer’s Roundtable meeting in June 2017, followed by additional meetings in October 2017,
December 2017, and March 2018. All of which were well attended by a variety of
representatives from the development community. In addition to those meetings, staff presented
the evolving fee programs to the Chamber of Commerce, EVC, Home Builders Association,
Save Our Downtown, the Bicycle Advisory Commission, and the Planning Commission.
Following the completion of the administrative draft Capital Facili ties Fee Program Nexus Study
staff embarked on a “Outreach Roadshow” from February 26, 2018 to March 9, 2018. During
this time frame staff shared the findings of the Nexus Study and met individually with
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developers, property owners, and stakeholders in the community to discuss how the
recommended fees would impact their specific projects. Some of those meetings resulted in
further refinement of the nexus study analysis and the feasibility considerations.
Recommended Capital Facilities Fee Levels
The recommended fee levels for the Capital Facilities Fee Program reflect a reduction strategy
that was developed by staff and the consultant team in response to Council direction received
during the two study sessions along with feedback received from the development community
and stakeholders throughout the process. Provided below is a summary of the components of the
policy reduction strategy:
Transportation – the Single-family fee is tiered to incentivize smaller, more affordable
units, maximum fee applies to single family units that are 1,400 sq. Ft. and larger, and for
single family units that are less than 1,400 sq. Ft. fees decrease proportionally by size.
Transportation – Multi-family fee is tiered so that the multi-family fee never exceeds the
single-family fee for the same unit size.
Transportation – Retail and Hotel uses are discounted by 60% (modified from existing
50% discount).
Transportation – Office and Industrial uses are discounted by 15%.
Parkland – Only single family and multi-family development will be charged impact fees.
Non-residential uses will not be charged development impact fees.
Public Safety – Police fees are discounted by 50%.
General Government – Fees will not be charged. The impact of this approach is that
should City administrative facilities need to expand as the Community grows, 100% of
the costs will need to be borne by other sources.
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While development impact fees overall are increasing, it is important to point out that with the
policy level recommendations, the Transportation Impact Fee component is decreasing by
approximately 11% or $13 million as compared to the City’s current transportation impact fee
program. Because multiple fee program areas are being consolidated into a Citywide fee, some
areas will realize an increase whereas some will realize a decrease in rates. An example of this is
within the Margarita Area, transportation fees for a single-family resident base fee will be
reduced from $12,928 to $9,828, over a $3,000 reduction per unit. This is consistent with
previous recommendations to reduce the geographic disparities and overall complexity of the
City’s development impact fee programs.
Implementation and Administration of the Capital Facilities Fee Program
The updated CFF and corresponding fee schedule will need to be adopted by City Council
Resolution (Attachment B) as enabled by the City’s Fee Ordinance (Attachment A). What this
means is that the existing Ordinance allows the City Council to adopt, by Resolution, a fee
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schedule consistent with supporting technical analysis and findings provided in the CFF Study.
The Resolution approach to setting the fee allows periodic adjustments of the fee amount that
may be necessary over time, without amending the enabling Ordinance. The existing Ordinance
will also need to be amended to address the primary implementation and administrative issues
and procedures associated with the CFF. In Section 8: Implementation and Administration of
CFF, of the CFF Study provided in Attachment C, there is a summary of the key
implementation and administrative elements.
Water and Wastewater Capacity and Connection Fee/Development Impact Fee Program
The Water and Wastewater Capacity and Connection Fee Study (Fee Study) commenced
separately from the CFF Study. The City contracted for these services with HDR Engineering,
Inc. A study session was conducted on February 7, 2017 during which time the Council directed
Utilities Department staff to explore various options for the Capacity and Connection Fee Study.
At the October 17, 2017 Council meeting, the Utilities Department presented four fee options
and recommended the fees found in Option 2 (water) and Option 4 (wastewater). These options
used a methodology that equitably distributed capacity-related investments between new
development and existing water and wastewater ratepayers.
The fees recommended on October 17, 2017 included a prioritized list of capital projects from
water and wastewater master plans prepared following the update of the General Plan Land Use
Element in 2014. The project costs in the Fee Study were equitably distributed between existing
customers through rates (84% of project costs) and new development through the recommended
fees (16% of project costs).
It is important to note the October 17, 2017 recommended fees included only the highest priority
water and wastewater projects necessary to provide the required capacity for the General Plan
that, apart from water source of supply and the WRRF project, could be feasibly delivered over
the next ten years. This differs from the methodology applied citywide to calculate maximum
fees.
At the October 17, 2017 meeting, Council took no action on the fees, but provided feedback.
Council supported staff’s recommendation to eliminate the wastewater catchment area fees in
favor of the citywide wastewater fee and the tiering of residential fees where reduced fees were
available for smaller residential units. Council directed staff to return with its recommended fees
with the City’s CFF Study so that the feasibility of the City’s entire fee program could be
considered comprehensively.
Citywide Fee Fee Per EDU
Existing Water Fee $11,322
Water Option 1 $11,872
Water Option 2* $15,780*
Existing Citywide Wastewater Fee $3,830
Wastewater Option 1 / Option 3 $ 8,165 / $10,721
Wastewater Option 2 / Option 4* $ 9,522 / $12,602*
NOTE:
October 17, 2017 Staff recommendation.
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Capacity and Connection Fees Incorporated into Overall Fee Burden “Prototypes”
Subsequently, the October 17, 2017 and January 9, 2018 study sessions focused on the Capital
Facilities Fee Study, EPS, Inc. (CFF Study consultant team) incorporated the Utilities
Department staff-recommended Options 2 (water) and 4 (wastewater) into its overall fee burden
prototypes.
When included with other proposed fees from the CFF Study, the total fee burden exceeded
thresholds identified by EPS for various residential and non-residential prototypes. Council
provided direction to Community Development staff to look for ways to reduce the total fee
burden.
To assist with balancing the various fee requirements throughout the City, the alternatives
presented in the Utilities Department October 17, 2017 staff report (Alternative 1 – Water and
Alternative 3 – Wastewater) were applied to the prototypes. These alternatives, which, apart
from the elimination of the wastewater catchment areas and the expanded tiered Equivalent
Dwelling Unit (EDU) pricing, are similar in methodology to the fees the City has currently and
are now being recommended. Selection of these options helps bring the total fee burden in line
with the identified thresholds for new development.
Because of this change, the following is eliminated from the water fee program:
Buy-in to the capacity available from existing water distribution, storage, and
treatment infrastructure.
Contribution toward capital projects identified in the Potable Water Distribution
System Operations Master Plan that are not debt financed.
Contribution toward expansion of recycled water infrastructure described in
the Recycled Water Master Plan.
Contribution toward expansion of the City’s groundwater program.
With the reduction in the water fee program under Alternative 1 (summarized in Table 2),
funding for capital projects would be from water rates. Due to the timing of necessary
improvements, offsite improvements may be required in some locations for development to
proceed due to existing conditions.
Because of this change, the following is eliminated from the wastewater fee program:
Buy-in to the capacity available from existing wastewater collection system
and water resource recovery infrastructure.
Contribution toward prioritized capital projects identified in the Wastewater
Collection System Infrastructure Renewal Strategy providing capacity to serve
future development that are not debt financed.
Contribution toward water resource recovery capital projects that are not debt
financed.
With the reduction in the wastewater fee program under Alternative 3, summarized in the table
below, funding for capital projects would be from wastewater rates. Due to the timing of
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necessary capacity improvements, offsite improvements may be required in some locations for
development to proceed due to existing capacity constraints.
Current (2017-18)
Development Impact Fees October 2017 Staff Recommendation April 2018 Staff Recommendation***
Fee
Program Per EDU Fee
Program
from Current
Fee Program Per EDU Fee
Program
from Current
Fee Program Per EDU
Water $65.9
million $11,322 $91.8
million +$26 million $15,780 $69.1
million +$3.2 million $11,872
Wastewater $35.1
million* $3,820** $73.3
million +$38.2 million $12,602 $62.4
million +$27.3 million $10,721
NOTES:
Includes $12.8 million of catchment area improvements.
Additional catchment area fees, where applicable.
Staff recommendation for April 2018 includes Alternative 1 (Water) and Alternative 3 (Wastewater) from October 17, 2017 Council Agenda
Report, provided as Attachment H.
Changing from the October 17, 2017 staff recommendation to the alternatives (Alternative 1 for
Water and Alternative 3 for Wastewater) impacts the City’s water and wastewater ratepayers.
Water Alternative 1 shifts $22.7 million to the water ratepayer, increasing the ratepayer burden
from approximately 84 percent of capacity related costs to 88 percent of these costs. Wastewater
Alternative 3 shift $10.9 million to the wastewater ratepayer from approximately 84 percent of
capacity related costs to 86 percent of these costs.
Impact on Water and Wastewater Ratepayer
October 2017 Staff Recommendation April 2018 Staff Recommendation*
WATER:
New Development $ 91,800,000 16% $ 69,100,000 12%
Water Ratepayer $ 481,950,000 84% $ 504,650,000 88%
TOTAL: $ 573,750,000 100% $ 573,750,000 100%
WASTEWATER:
New Development $ 73,300,000 16% $ 62,400,000 14%
Wastewater Ratepayer $ 389,406,250 84% $ 395,725,000 86%
TOTAL: $ 458,125,000 100% $ 458,125,000 100%
NOTE:
Staff recommendation for April 2018 includes Alternative 1 (Water) and Alternative 3 (Wastewater) from October 17, 2017 Council Agenda
Report, provided as Attachment H.
Recommended Water and Wastewater Development Impact Fees
Both the water and wastewater development impact fee programs establish citywide fees,
eliminating the current wastewater catchment area fees applicable in areas served by wastewater
lift stations. The fee programs will continue to be referred to as “development impact fees” as the
recommended fees are not at the level that included the buy-in component to system capacity.
The residential “tiers” are proposed to align water consumption and wastewater generation with
residential unit size. Non-residential fees continue to be assessed by meter size equivalency.
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Recommended Water and Wastewater Development Impact Fees
Residential (by Unit Size)
EDU
Water
Development
Impact Fee
Wastewater
Development
Impact Fee
Residential Unit (1,201+ square feet) 1.0 $11,872 $10,721
Residential Unit (801 to 1,200 square feet) 0.8 $9,497.60 $ 8,577
Residential Unit (451 to 800 square feet) 0.7 $8,310.40 $ 7,505
Mobile Home 0.6 $7,123.20 $ 6,433
Studio Unit (450 square feet or less) 0.3 $3,561.60 $ 3,216
Non-Residential (by Meter Size)
1.0 $11,872 $10,721
1” 1.7 $20,182 $18,226
1.5” 3.4 $40,365 $36,451
2” 5.4 $64,109 $57,893
3” 10.7 $127,030 $ 114,715
4” 16.7 $198,262 $ 179,041
6” 33.4 $396,525 $ 358,081
Impact Fee Program Feasibility Considerations
City staff and the consultant team, with the assistance of the development community, created
general development prototypes for evaluation that represent current development projects in the
City. Those prototypes represent the following types of development:
Single family residential units (large lot to small lot)
Multi-family residential units
Office/Service
Industrial
Retail
The CFF Study consultant team conducted market research and interviewed developers in San
Luis Obispo to obtain project-specific information to estimate appropriate values. Provided
below is a summary of the analysis methodology, the specific case studies that were evaluated,
and the estimated total fee burden thresholds that were evaluated.
The feasibility analysis charts, provided in Attachment E, illustrate existing fee levels compared
with the revised fee levels for a series of development prototypes against the back-drop of
industry standard infrastructure burden feasibility norms.
Throughout the charts, there are some areas where the consultant team made certain assumptions
and used some judgement about which fees to show and/or the best way to illustrate the cost of a
fee that is otherwise not straight-forward to calculate. Notes are included throughout to explain
any assumptions that were used. In addition, because affordable housing fees, public art-in-lieu
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fees and school district fees are not part of this update, they are shown in aggregate, though the
detail of each fee is shown on the data table that accompanies each feasibility chart.
In all cases, the development impact fees reflected on the charts are based on the staff
recommended fee level.
Benchmark Cities Analysis
Under the recommended fee program, the City’s Transportation Impact fee rates will be on the
lower end of spectrum as compared to comparable agencies, and one of the lowest rates
particularly for high traffic generating land uses. For example, the chart below depicts the
proposed transportation impact fee rates for Retail & Office land uses among these various
agencies. The order of magnitude in comparison is similar for other land use rates as well such as
residential and industrial.
CONCURRENCES
The proposed update to the City’s development impact fee programs combined sound technical
analysis with a collaborative, iterative, and informed decision-making process. The technical
analysis was grounded in legally defensible nexus. The recommendations are supported by the
Public Works, Utilities, Police, Fire and Park and Recreation Departments.
ENVIRONMENTAL REVIEW
The adoption of the proposed Ordinance and Resolutions is (1) not a Project under the
California Environmental Quality Act (”CEQA”) and is therefore exempt pursuant to CEQA
Guidelines section 15378(b)(4): ( 2) statutorily exempt pursuant to CEQA Guidelines section
15273(a)(4) (Rates, Tolls, Fares and Charges for obtaining funds for capital projects necessary to
maintain service within existing service area); (3) not intended to apply to specific capital
improvement projects and as such it is speculative to evaluate such projects now and any
specifically identified transportation projects were already evaluated under CEQA and imposed
as mitigation measures in previously certified EIRs and /or adopted mitigated negative
declarations; and/or (4) not intended to, nor does it , provide CEQA clearance for future
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development-related projects by mere payment of the fees. Each of the foregoing provides a
separate and independent basis for CEQA compliance and when viewed collectively provides an
overall basis for CEQA compliance.
FISCAL IMPACT
The City of San Luis Obispo’s Economic Development Strategic Plan identifies the cost of
infrastructure as one of the major barriers to the creation of head of household jobs. The attached
Nexus Study is an important tool for understanding these costs, and how to ensure that they are
allocated in a way that is consistent with City policy. By identifying who benefits from a given
infrastructure project, costs can be assigned to new development (through a development impact
fee), or to existing development (e.g. through contributions made by the General Fund or through
water and sewer rate increases).
The General Plan includes an important policy regarding the cost of growth:
1.13.9. Costs of Growth
The City shall require the costs of public facilities and services needed for new development
be borne by the new development, unless the community chooses to help pay the costs for a
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
services and facilities which are required to serve the project, and which are reasonably
related to the new growth attributable to the development.
The CFF Study is a tool to help the City establish an effective AB 1600 (Mitigation Fee Act)
Program to offset the cost of infrastructure needed to support build-out of the General Plan. The
facilities and infrastructure projects identified in the CFF Study have been determined to be
necessary to support the community’s plan. The projects come from the General Plan Land Use
and Circulation Elements, the Bicycle Transportation Plan, various specific plans, the Draft
Facilities Master Plan, the Fire Master Plan and other forward-looking planning documents.
In total, the projects included in the CFF Study will cost $360 million to deliver (excluding cost
associated with parkland acquisition and improvements projects that will be identified in the
update of the Parks and Recreation Element/Master Plan). Of this total, $209 million is identified
as the maximum amount that could be recovered through impact fees, consistent with the
requirements of AB 1600. The gap between the full cost recovery and the recommended number
will require funding from other sources and is not currently included in long-range forecast
projections. However, the City Council has previously determined that the maximum fees should
not be charged to ensure that new development (smaller, more affordable housing units in
particular) remains feasible. In other words, the City Council is choosing to help pay the costs to
help obtain community-wide benefits.
Based on the Council’s direction, the proposed fee program includes policy reductions to the
maximum fees that could be charged in the areas of General Government (no fee being charged),
Transportation (reductions for smaller units), Water and Wastewater (reduced scope of impact
fee program), Public Safety (reduced fee), and Parks (no fee charged for commercial). With
these policy reductions implemented, the total amount expected to be recovered through the
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City’s development impact fee program is $146 million, which includes the administrative fee.
Securing Supplemental Funding
The CFF Program is not appropriate for funding the full amount of all capital costs identified in
the CFF Study. The difference between the $360 million total project cost and the $146 million
in expected fee revenue is $214 million. As a result, the City will have to identify funding and
pay for improvements related to existing developments and improvements not funded by the
CFF Program or any other established funding source. Examples of such sources include the
following:
1. General Fund Revenues - The city could allocate a portion of its General Fund revenues
for discretionary expenditures. Currently existing General Fund contributions to capital
projects are supported primarily by Measure G revenues. These revenues have been
primarily allocated toward maintaining existing infrastructure and forecasts show that
sacrifices would need to be made to our existing maintenance programs to fund project
enhancements or new projects. Council could direct some of these funds toward CFF
Program projects. This could reduce the amount available for maintaining existing
infrastructure. In addition, Council could allocate other General Funds currently utilized
on other service priorities toward CFF Program projects.
2. Assessments and Special Taxes – The City could fund a portion of capital facilities
costs using assessments and special taxes. For example, the establishment of a Mello-
Roos Community Facilities District would allow the City to levy a special tax to pay debt
service on bonds sold to fund construction of capital facilities or to directly fund capital
facilities. The City could also seek voter approval of a special tax through ballot initiative
to provide funding for a range of capital improvements. There will be more detailed
discussion of funding alternatives at the April 17, 2018 Council meeting regarding
Funding the Future of SLO.
3. Regional, State or Federal Funds – The City might seek and obtain grant of matching
funds from Regional, state and Federal sources to help offset the costs of required capital
facilities and improvements. As part of its funding effort, the City should continue to
research and monitor these outside revenue sources and apply for funds as appropriate.
4. Other Grants and Contributions – A variety of grants or contributions from private
donors could help fund several capital facilities. For example, private foundations and/or
charity organizations may provide money for certain park and recreation or cultural
facilities.
As part of the adoption of the CFF Program, the City will need to adopt a finding that it will
obtain and allocate funding from various other sources for the fair share of the cost s of
improvements identified in the CFF Study that are not funded by the CFF Program as well as any
additional funding required to “backfill” any policy-based fee reductions. If additional funding
does not materialize, then substantial revisions will need to be made to the program or General
Plan policy changes will need to be made to change planned levels of services. Any
supplemental funding identified will be incorporated into the CFF Program as part of the next
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five-year update.
ALTERNATIVES
The following alternatives are available to the Council should you choose to not adopt the
reduced fees as recommended by staff:
1. Adopt a Capital Facilities Fee Program Update that charges the maximum fees. This
alternative is not recommended because it could create total fee burden feasibility issues
for new development, particularly small-lot, single-family development and multi-family
development.
2. Adopt a Water and Wastewater Development Fee Program that charges fees in
accordance with staff’s October 17, 2017 recommendation (Water Option #2 and
Wastewater Option #4). Those options ensure that existing ratepayers and new
development equitably apportion costs related to existing and future capital expenditures.
However, this alternative is not recommended because it could create total fee burden
feasibility issues for new development, particularly small lot single family development.
3. Do not adopt and implement the Capital Facilities Fee Program Update and continue to
charge the existing development impact fees that are currently in place for Transportation
and Parkland. However, this alternative is not recommended because the current fee
program does not include the infrastructure projects needed to support new development
through the buildout of the General Plan.
Attachments:
a - CFFP Ordinance
b - CFFP Resolution
c - Capital Facilities Development Impact Fee Nexus Study
d - 2018 Resolution Water and Wastewater
e - Feasibility Charts
f - Council Reading File - Council Agenda Report - Study Session #1
g - Council Reading File - Council Agenda Report - Study Session #2
h - Council Reading File - Council Agenda Report Water and Wastewater 10_17_17
i - Capacity Fee and Connection Fees Study Draft Final
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Item 15
hdrinc.com
2365 Iron Point Road, Suite 300, Folsom, CA 95630
T 916.817.4700 F 916.817.4747
May 13, 2019
Ms. Jennifer Metz
Utilities Project Manager
Utilities Department
City of San Luis Obispo
879 Morro Street
San Luis Obispo, CA 93401-2710
RE: Addendum to Present Wastewater Development Impact Fees
Dear Ms. Metz:
Introduction
In April 2018, HDR Engineering Inc. (HDR) provided the City of San Luis Obispo (City) the
development of a Water and Wastewater Capacity and Connection Fee Study as part of
a comprehensive City wide AB 1600 fee update. The City Council adopted wastewater
Option 3, with an effective implementation date of July 1, 2018, for a total wastewater
development impact fee of $10,721 per EDU.
The methodology used for the adopted fees, calculated in Option 3, are based on a
similar methodology to the 2013 Fee Study where only specific growth projects and
financing costs are included in the fee calculation. This option reflects the increased
capital costs of these debt-financed projects as well as growth related projects. This
option does not include a buy-in component to existing wastewater infrastructure. This
option also eliminated catchment area (lift station) fees which include the cost for sewer
lift stations in favor of a citywide approach to the fees. The catchment area fees of
approximately $15 million in capital improvements is attributed to all approximately
5,800 future EDUs in the City. This fee represented a citywide cost-based capacity and
connection fees based on the fair share of infrastructure and capital improvements
needed to serve future development.
Recently there has been discussion and explanation requested on the wastewater
development impact fee in regards to the catchment area (lift stations) portion of the
fee. In order to provide better clarification on the wastewater fees, t he City has
requested the wastewater fee be updated with the addition of the Buckley lift station,
which is attributed to the Tank Farm area, as included in the citywide fee.
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Ms. Metz
May 13, 2019
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Overview
In February 2019, the City was provided with cost information for the Buckley lift station
from Avila Ranch, LLC. The Buckley lift station is proposed to serve the Avila Ranch
residential development with up to 720 units on a 150-acre site north of Buckley Road.
The Buckley lift station would also serve future development east and west of the Avila
Ranch project within the boundaries of the Airport Area Specific Plan. Following
construction by Avila Ranch and acceptance by the City, the Buckley lift station would
be the ninth public lift station in the City maintained by the Utilities Department’s
Wastewater Collection staff. Therefore, it is consistent with the City’s methodology to
include the costs of the Buckley lift station in the City’s wastewater development impact
fee.
Present Wastewater Development Impact Fee
The City charges new customers connecting to the wastewater system a one-time
wastewater development impact fee. The current City ordinance provides a
development impact fee according to type of use. The EDU is based on a residential
customer and applied to other customer classes based on generally accepted flow
assumptions by customer type, reflective of the gallon per day (GPD) capacity use in the
equivalent dwelling unit (i.e., EDU %)
The City, per City resolution, updates the fees each year by the Consumer Price Index
(CPI). The City’s current wastewater development impact fees, as of July 1, 2018, are
shown below in Table 1.
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Item 15
Ms. Metz
May 13, 2019
Page 3
Table - 1
Present Wastewater Development Impact Fees
$/Equivalent Dwelling Unit (EDU)
Land Use Category
EDU
Unit
Development
Impact Fee
(Citywide)[1]
Residential (per dwelling unit size)
>= 1,201 sq. ft. (fees are per unit) 1.0 $10,721
801-1,200 sq. ft. (fees are per unit) 0.8 8,577
451-800 sq. ft. (fees are per unit) 0.7 7,505
<= 450 sq. ft. (fees are per unit) 0.3 3,216
Mobile/Manufactured Home (per dwelling unit)
Mobile/Manufactured Home 6,433
Non-Residential
3/4" 1.0 $10,721
1-inch 1.7 18,226
1-1/2 inch 3.4 36,451
2-inch 5.4 57,893
3-inch 10.7 114,715
4-inch 16.7 179,041
6-inch 33.4 358,081
[1] – City’s current wastewater development impact fees effective July 1, 2018.
Amended Wastewater Development Impact Fee
The City’s current wastewater development impact fees include a city wide fee and no
longer includes additional catchment area charges for specific area improvements. The
catchment areas are regions in the City served by sewer mains, lift stations, and force
mains. Each catchment area varies in the amount of wastewater flow pumped, due to
the topography, area, and land uses served. The total cost of the catchment area
improvements is over $34 million, with approximately $15 million attributed to new
development. The approximately $15 million in capital improvements is attributed to
all future EDUs in the City.
The Buckley catchment area fee, attributed to Tank Farm, is applicable to development
in the Airport Area Specific Plan, including the Avila Ranch project and other
development east of that p roject along Buckley Road. The fee is being amended to
capture these costs that were not included at the time of the last update to the fee.
Total construction and inspection cost for the Buckley lift station is $1,594,759. The
future non-vested EDUs are 5,234. The total costs are divided by the total EDUs to be
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Ms. Metz
May 13, 2019
Page 4
served to calculate the cost per EDU. This results in an additional amended fee of $305
($1,594,759/5,234 = $305) as shown below in Table 2.
Table 2
Wastewater Development Impact Fee Update
Adopted July 1, 2018 Fee $10,721
Amended Fee:
Buckley Lift Stations Cost $1,594,759
Future EDUs (non-vested) 5,234
Cost per EDU = $305 305
Amended Fee $11,026
The current wastewater development impact fees includes a residential and non-
residential land use type. The residential fee is based on per unit EDU. The non -
residential is based on meter size. The City’s proposed amended fee are shown below
in Table 3 by land use category.
Table - 3
Present and Amended Wastewater Development Impact Fees
$/Equivalent Dwelling Unit (EDU)
Land Use Category
EDU
Unit
Present Fee
(Citywide)[1]
Amended
Fee
Residential (per dwelling unit size)
>= 1,201 sq. ft. (fees are per unit) 1.0 $10,721 $11,026
801-1,200 sq. ft. (fees are per unit) 0.8 8,577 8,821
451-800 sq. ft. (fees are per unit) 0.7 7,505 7,719
<= 450 sq. ft. (fees are per unit) 0.3 3,216 3,307
Mobile/Manuf. (per dwelling unit)
Mobile/Manufactured Home 0.6 6,433 6,616
Non-Residential (per meter size)
3/4" 1.0 $10,721 $11,026
1-inch 1.7 18,226 18,744
1-1/2 inch 3.4 36,451 37,488
2-inch 5.4 57,893 59,540
3-inch 10.7 114,715 117,978
4-inch 16.7 179,041 184,134
6-inch 33.4 358,081 368,268
[1] – City’s current wastewater development impact fees effective July 1, 2018.
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HDR would recommend that the City continue to adjust the wastewater development
impact fees on an annual basis. The City currently uses the Consumer Price Index (CPI)
for this update. This method of escalating the City’s fees should be used for no more
than a five-year period. After five years, HDR recommends that the City update the
development impact fees based on the actual cost of infrastructure and any new
planned facilities that would be contained in an updated master plan or CIP.
It is further recommended the City to consider using the Engineering News Record
Construction Cost Index (ENR -CCI) to reflect the cost of interest and inflation instead of
the CPI. The ENR-CCI is a reliable and consistent indices that tracks construction costs
and is published every month showing the national average of twenty cities.
Legal Overview
California law for the establishment of development impact fees is in California
Government Code Section 66000, under the Mitigation Fee Act (Assembly Bill 1600). The
Act became law in January 1988 and requires local governments to document the
following when adopting an impact fee:
1. Identify the purpose of the fee;
2. Identify the use of the fee revenues;
3. Determine a reasonable relationship between the use of the fee and the type of
development paying the fee;
4. Determine a reasonable relationship between the need for the fee and the type
of development paying the fee; and
5. Determine a reasonable relationship between the amount of the fee and the
cost of the facility attributable to development paying the fee.
In summary, the fee or charge shall not exceed the estimated reasonable cost of
providing the service for which the fee or charge is imposed. AB 1600 establishes the
legal requirement for there to be a nexus between the project and fee. In addition, fee
revenues can only be used for their intended purpose.
HDR, in its calculation of the wastewater development impact fees presented here has
used generally accepted engineering and ratemaking principles. This should not be
construed as a legal opinion with respect to California law. HDR recommends that the
City have its legal counsel review the development impact fees as set forth here to
ensure compliance with California law.
Summary
The development of the wastewater development impact fee by HDR utilized generally
accepted engineering and ratemaking principles, while applying City specific planning,
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Ms. Metz
May 13, 2019
Page 6
asset and customer information. The City’s recent Water and Wastewater Capacity and
Connection Fee report presented on A pril 3, 2018, along with the adopted fees effective
July 1, 2018 were the basis for the amended fee. The amended fee was updated as
follows and did not include any updates to any other key assumptions of the prior
analysis. The amended fee includes the following:
➢ Includes the cost of the Buckley lift station (estimated at $1.5 million), attributed
to Tank Farm, to the citywide wastewater development impact fee
➢ Present the updated wastewater development impact fee to City Council on
June 4, with new fee effective June 5, 2019
➢ Amended fee does not include the annual CPI adjustment
Sincerely,
HDR Engineering, Inc.
Shawn W. Koorn
Associate Vice President
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Item 15
R ______
RESOLUTION NO. _____ (2019 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, AMENDING THE CITY’S WASTEWATER
DEVELOPMENT IMPACT FEES
WHEREAS, Chapter 4.20.140 of the City of San Luis Obispo Municipal Code established
wastewater development impact fees and provides for the setting of the fee amounts and other
matters by resolution of the Council; and
WHEREAS, the City Council has approved the Water Resource Recovery Facility
Facilities Plan including regulatory requirements and capacity improvements necessary to
accommodate growth under the City’s General Plan; and
WHEREAS, the City Council has approved the Wastewater Collection System
Infrastructure Renewal Strategy including capacity improvements necessary to accommodate
growth under the City’s General Plan; and
WHEREAS, updated cost information for capital projects necessitate updating the fees to
address new development’s share of the cost for lift stations; and
WHEREAS, 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 the change in fees in not intended to fund expansion of capital projects
not otherwise evaluated under CEQA. All Master Plans were evaluated for their respective impacts
to the environment and this action to adjust fees merely provides a mode equitable distribution of
costs associated with envisioned infrastructure; and
WHEREAS, an analysis of the required amendment to the wastewater development
impact fees to support the City’s operations, maintenance and debt service in the Water Resource
Recovery Facility Facilities Plan, the Wastewater Collection System Infrastructure Renewal
Strategy, and updated cost information for lift stations and other capital projects have been
completed and amended fees identified as included in the attached Exhibit 1.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo
as follows:
SECTION 1. Findings
a) The purpose of development impact fees is to protect the public health, safety, and
general welfare by providing adequate wastewater collection and treatment facilities to
satisfy the needs of new development and to mitigate the impacts of new development
on the City’s wastewater facilities and improvements.
b) Development impact fees collected pursuant to this resolution shall be used only to pay
for facilities and improvements identified in the development impact fee analysis and
shall not be in lieu of any other fee or tax as may be required by the Municipal Code.
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Resolution No. _____ (2019 Series) Page 2
c) There is a reasonable relationship between the types of development on which the
development impact fees are imposed and the use of the development impact fees and
the need for the facilities and improvements. All new development requires adequate
wastewater collection and treatment facilities to protect the public health and safety.
d) As required by Government Code Section 66001 et seq., there is a reasonable
relationship between the amount of the development impact 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 as shown in the 2019 Wastewater Development Impact Fee Study
prepared by HDR Engineering, Inc. the findings and analysis of which are hereby
incorporated by reference, have been allocated to new development on the basis of
dwelling unit size and type (residential) or water meter size (non-residential).
SECTION 2. Cost Estimates
At any time that the actual or estimated costs of facilities identified in the development
impact fee analysis changes, the Finance Director shall review the development impact fee and
determine whether the change affects the amount of the fees. If the development impact fees are
significantly affected, the Finance Director shall, within thirty (30) days, recommend to the
Council a revised fee for their consideration.
SECTION 3. Amount of Development Impact Fees
Effective June 5, 2019, wastewater development impact fees shall be in the amounts set
forth in Exhibits A attached hereto. Unless otherwise acted upon by the Council, the amount of the
development impact fees will automatically be adjusted on July 1 of each year by the U.S. Bureau
of Labor Statistics consumer price index for all urban consumers (CPI-U), all cities average for
the prior year. Since the facilities and improvements for which development impact fees are
charged will be financed through bonds or other form of debt, the annual adjustments are indexed
to consumer prices rather than construction costs.
SECTION 4. Time of Payment
a) Development impact fees for any development project or portion thereof shall be
payable prior to issuance of building permits required for that development or at a later
time as determined by the Community Development Director and shall be collected by
the Building Official. Under Government Code Section 66007(b), the City is authorized
to collect the development impact fee at the time of building permit issuance or at a
subsequent date because the development impact fees are for public facilities and
improvements for which an account has been established and funds appropriated, and
for which the City has adopted a proposed construction schedule, or the development
impact fees are to reimburse the City for expenditures previously made.
b) For any development project or portion thereof, development 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.
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Resolution No. _____ (2019 Series) Page 3
SECTION 5. Separate Accounts.
The Finance Director shall deposit fees collected under this resolution in separate
wastewater development impact fee accounts 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.
Upon motion of _______________________, seconded by _______________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
The foregoing resolution was adopted this _____ day of _____________________ 2019.
____________________________________
Mayor Heidi Harmon
ATTEST:
____________________________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
_____________________________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City
of San Luis Obispo, California, this ______ day of June, 2019.
____________________________________
Teresa Purrington
City Clerk
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Resolution No. _____ (2019 Series) Page 4
EXHIBIT A
WASTEWATER DEVELOPMENT IMPACT FEE
Effective June 5, 2019
Equivalent Dwelling
Unit (EDU)
Wastewater
Development Impact Fee
Residential (by Unit Size)
Residential Unit (1,201 sq. ft. or more) 1.0 $11,026
Residential Unit (801 to 1,200 sq. ft.) 0.8 $8,821
Residential Unit (451 to 800 sq. ft.) 0.7 $7,719
Mobile Home 0.6 $6,616
Residential Unit (450 sq. ft.) or less) 0.3 3,307
Non-Residential (by Meter Size)
¾” Meter 1.0 $11,026
1” Meter 1.7 $18,744
1.5” Meter 3.4 $37,488
2” Meter 5.4 $59,540
3” Meter 10.7 $117,978
4” Meter 16.7 $184,134
6” Meter 33.4 $368,268
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Item 15
6/4/2019
06‐04‐2019 Item 15 ‐ Staff Presentation 1
Update to Wastewater
Development Impact Fees
June 4, 2019
Update to Wastewater Development Impact Fees
Background
Council adopted the existing wastewater
development impact fees in the Spring of 2018
City was assisted by HDR Engineering, Inc.
Growth related cost of public sewer lift stations were
included in one citywide fee
Current fee is $10,721 per EDU for FY 2018-19
1
2
6/4/2019
06‐04‐2019 Item 15 ‐ Staff Presentation 2
Update to Wastewater Development Impact Fees
Buckley Sewer Lift Station
was a planned public facility
to serve areas within the
Airport Area Specific Plan
Avila Ranch project was
conditioned to design and
construction the Lift Station
with capacity to serve
surrounding properties
Lift station installation
Criteria Used to Determine Updated Fees
Determination of future growth in equivalent dwelling
units (EDU)
Construction cost of the Buckley Sewer Lift Station
added to the Fee Program
Update to Wastewater Development Impact Fees
3
4
6/4/2019
06‐04‐2019 Item 15 ‐ Staff Presentation 3
Total construction cost for the Lift Station is
estimated at $1,594,759
Increases the Wastewater Fee Program from $62.4
million to $64 million of capital assets
Increase is three percent, or $305 to $11,025.69 per
EDU
Proposed effective date for the updated fees is
June 5, 2019
Update to Wastewater Development Impact Fees
Questions?
5
6
6/4/2019
06‐04‐2019 Item 15 ‐ Staff Presentation 4
Recommendation
Adopt a resolution entitled “A Resolution of the City
Council of the City of San Luis Obispo, California,
Amending the City’s Wastewater Development Impact
Fees”
Residential (by Unit Size)
EDU
Wastewater
Development
Impact Fee
Residential Unit (1,201+ square feet) 1.0
$11,025.69
Residential Unit (801 to 1,200 square feet) 0.8
$8,820.55
Residential Unit (451 to 800 square feet) 0.7
$7,717.99
Mobile Home 0.6
$6,615.41
Studio Unit (450 square feet or less) 0.3
3,307.71
Non‐Residential (by Meter Size)
¾” 1.0
$11,025.69
1” 1.7
$18,743.68
1.5” 3.4
$37,487.35
2” 5.4
$59,538.74
3” 10.7
$117,974.90
4” 16.7
$184,129.10
6” 33.4
$368,258.10
7
8
6/4/2019
06‐04‐2019 Item 15 ‐ Staff Presentation 5
Reimbursement Agreement
with Avila Ranch, LLC, for
Construction of the Buckley
Sewer Lift Station
June 4, 2019
Reimbursement Agreement with Avila Ranch, LLC
Background
Avila Ranch, LLC, was conditioned to design and
construct the Buckley Sewer Lift Station to serve
its project
Buckley Sewer Lift Station would also serve
future development east and west of the Avila
Ranch project in the Airport Area
The City’s Municipal Code allows a developer to
request reimbursement from the City when
improvements are required at a greater capacity
than required for their project
9
10
6/4/2019
06‐04‐2019 Item 15 ‐ Staff Presentation 6
Reimbursement Agreement with Avila Ranch, LLC
Buckley
Sewer
Lift
Station
Reimbursement Agreement with Avila Ranch, LLC
Reimbursement Methodology
Staff worked with representatives of Avila Ranch
on the Agreement provided in the Resolution
Reimbursements would be made to Avila Ranch
from wastewater development impact fees as the
project is built out on a per equivalent dwelling unit
(EDU) basis, as estimated below:
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06‐04‐2019 Item 15 ‐ Staff Presentation 7
Questions?
Recommendation
Adopt a Resolution entitled “A Resolution of the City
Council of the City of San Luis Obispo, California,
approving a Wastewater Reimbursement agreement for
construction of the Buckley Sewer Lift Station,”
and
authorize the Mayor to execute the Agreement and
authorize the Utilities Director to implement the
Agreement.
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06‐04‐2019 Item 15 ‐ Staff Presentation 8
Packet Page 256
Reimbursement Agreement with Avila Ranch, LLC
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6/4/2019
06‐04‐2019 Item 15 ‐ Staff Presentation 9
Packet Page 257
Reimbursement Agreement with Avila Ranch, LLC
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