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HomeMy WebLinkAbout09-17-14City of San Luis Obispo, Agenda, Planning Commission Any writings or documents provided to a majority of the Planning Commission regarding any item on this agenda will be made available for public inspection in the Community Development, 919 Palm Street, during normal business hours. SAN LUIS OBISPO PLANNING COMMISSION SPECIAL MEETING AGENDA Council Chamber City Hall - 990 Palm Street San Luis Obispo, CA 93401 September 17, 2014 Wednesday 6:00 p.m. CALL TO ORDER/PLEDGE OF ALLEGIANCE ROLL CALL: Commissioners Hemalata Dandekar, Michael Draze, John Fowler, Ronald Malak, William Riggs, Vice-Chairperson Michael Multari, and Chairperson John Larson ACCEPTANCE OF AGENDA: Commissioners or staff may modify the order of items. PUBLIC COMMENT: At this time, people may address the Commission about items not on the agenda. Persons wishing to speak should come forward and state their name and address. Comments are limited to five minutes per person. Items raised at this time are generally referred to staff and, if action by the Commission is necessary, may be scheduled for a future meeting. PUBLIC HEARINGS: NOTE: Any court challenge to the action taken on public hearing items on this agenda may be limited to considering only those issues raised at the public hearing or in written correspondence delivered to the City of San Luis Obispo at, or prior to, the public hearing. Any decision of the Planning Commission is final unless appealed to the City Council within 10 days of the action (Recommendations to the City Council cannot be appealed since they are not a final action.). Any person aggrieved by a decision of the Commission may file an appeal with the City Clerk. Appeal forms are available in the Community Development Department, City Clerk’s office, or on the City’s website (www.slocity.org). The fee for filing an appeal is $273 and must accompany the appeal documentation. If you wish to speak, please give your name and address for the record. Please limit your comments to three minutes; consultant and project presentations limited to six minutes. Planning Commission Agenda Page 2 The City of San Luis Obispo is committed to include the disabled in all of its services, programs, and activities. Please contact the City Clerk or staff liaison prior to the meeting if you require assistance. 1. City-Wide. GPI/ER 15-12: Continued review of the Draft Land Use and Circulation Elements (LUCE) and associated Final Environmental Impact Report; City of San Luis Obispo – Community Development Dept., applicant. (Gary Kaiser) Focus for this meeting: Provide recommendation to City Council for updated Policies and Programs in Chapters 6-10 and 12-16 of the draft Circulation Element; and review and provide recommendation to City Council for draft Financial Report information associated with the update of the Land Use and Circulation Elements of the General Plan. COMMENT AND DISCUSSION: 2. Staff a. Agenda Forecast 3. Commission ADJOURNMENT Presenting Planner: Gary Kaiser 2222 PLANNING COMMISSION AGENDA REPORT SUBJECT: Review and recommendation of the LUCE Update Financial Report and Circulation Element Chapters 6-10 & 12-16; and Land Use Element diagram and Zoning updates. PROJECT ADDRESS: Citywide BY: Gary Kaiser, contract planner Phone Number: 781-7097 E-mail: gkaiser@slocity.org FILE NUMBER: GPI/ER 15-12 FROM: Derek Johnson, Community Development Director RECOMMENDATION: Recommend the City Council take the following actions: (1) Approve policy and program updates for Circulation Element Chapters 6-10 & 12-16; and (2) Approve changes to the Land Use Element diagram and associated Zoning updates. SITE DATA Applicant City of San Luis Obispo Representative Gary Kaiser, Contract Planner Zoning Multiple General Plan Multiple Site Area ~13 square miles Application Complete February 1, 2012 Environmental Status Environmental Impact Report FEIR released on 9-3-14 1.0 BACKGROUND For a summary of previous review including outreach efforts, public review, goals of the update, and previous Planning Commission review, please see the previous staff reports from the continued 8-27-14 Planning Commission hearing & 9-10-14 & 9-11-14 Planning Commission Hearings. Previous staff reports are available at: http://www.slocity.org/communitydevelopment/plancom/stfrprts.asp Meeting Date: 9-17-14 Item Number: 1 Meeting Date: 9-18-14 Item Number: 1 PC1 - 1 GPI/ER 15-12 (City-wide LUCE update) 9-17-2014 & 9-18-2014 Financial information & CE Chapters 6-1 2.0 COMMISSION’S PURVIEW The Planning Commission is responsible for reviewing proposed changes to the General Plan and for making recommendations to the City Council under Government Code section §65353. 3.0 PROJECT INFORMATION The meetings of September 17th and 18th have been scheduled to address financial information, remaining Circulation Element Chapter review, and Land Use Element diagram and zoning updates. Review is anticipated to occur as follows: September 17th: Review Financial Information; and Circulation Element Chapters 6-10 & 12-16 September 18th: Carryover of items not yet completed from Planning Commission meetings of September 11th & September 17th. Land Use Element Diagram and Zoning changes 3.1 FINANCIAL REPORT The fiscal impact analysis of the LUCE update (Attachment 1) provides information about the fiscal balance of the land uses and the cost of the infrastructure to support those uses. This information will be used to inform the Commission and the Council regarding the mix of uses being proposed through the update and will set the stage for future efforts to define the fee program and facilities financing approaches that will support implementation. Development supported by the LUCE update will generate demands for local government services such as police, fire, utilities, community development, as well as increased demands on facilities such as parks and government buildings. This same development will also generate revenue to help support these demands through taxes and fees. The analysis of how the cost of the demand balances with the off-setting revenue associated with the types of uses supported by the LUCE update is addressed in the fiscal impact report. In general, residential development generate less income than it costs the community to serve; and non-residential development (especially those generating transient occupancy tax and retail sales tax) generate more income than it costs the community to serve. “This effect frequently is exacerbated over time. Thus, community plans should strive to develop a balance of land use that includes sufficient net revenue generators to offset financial drains and/or to avoid diminishing service levels.”1 The findings from the report indicate the new development associated with the LUCE would generate a net neutral to slightly net positive fiscal impact. This understanding of the relative balance of demand for public services and cost to respond is important to ensure the City of San Luis Obispo is able to meet the expectations of its citizens, both current and future. It is an important component, though not the only factor, in creating a plan that meets the desired 1 Multari, Coleman, Hampian, and Statler. Guide to Local Government Finance in California, Solano Press Books, 2012. PC1 - 2 GPI/ER 15-12 (City-wide LUCE update) 9-17-2014 & 9-18-2014 Financial information & CE Chapters 6-1 vision of the community. The information is provided to the Planning Commission as context for the LUCE update but no further action or recommendation is required. This report is intended to inform the Commission and Council regarding the fiscal impacts of land uses supported by the LUCE and will provide valuable information for the public facility fee update that will follow LUCE adoption. 3.2 CIRCULATION ELEMENT REVIEW The Circulation Element is shown in legislative draft format to indicate where additions and deletions to existing policies and programs are proposed. Descriptions under the chapter headings below summarize the draft changes that were reviewed by Commission and endorsed by City Council for review through the EIR process – no changes have been made to the documents. Please note that the Table of Contents, figures and tables are will be updated and all references will be corrected in the final version. The Commission should review the legislative draft documents and be prepared to pause for discussion of those policies or programs for which Commissioners wish to make adjustments for Council consideration. 3.2.1 Circulation Element – Chapter 6: Multi-Modal Circulation This is a new chapter which responds to Assembly Bill 1358 (2008), The Complete Streets Act, which requires all cities updating a Circulation Element to plan for development of multi- modal transportation networks. Policies in this chapter establish the Complete Streets and Multimodal Level of Service (LOS) Objectives, Standards, and Significance Criteria. Policies for Modal priorities for Level of Service are also established along with thresholds of significance and mitigation policies for review under the California Environmental Quality Act (CEQA). 3.2.2 Circulation Element – Chapter 7: Traffic Management Chapter 7 establishes policies that would manage expansion of roadways to only accommodate increased vehicular traffic associated with development under the Land Use Element and regional transportation plans. Policies also would increase support for non-automobile travel by allocating transportation funding across various modes of transportation and to reduce vehicle speeds in residential neighborhoods where possible. A key policy in this chapter directs the city to adopt funding guidelines to align with modal split objectives. Staff recommends additions to 7.0.2 and 9.1.6 that indicate roundabouts are a preferred intersection control for reasons of vehicle speed reduction, safety, and operational benefits. This direction may be found on page 3-22 of the FEIR. 3.2.3 Circulation Element – Chapter 8: Neighborhood Traffic Management Chapter 8 contains policies to protect residential neighborhoods from deteriorating traffic conditions by minimizing cut through traffic and incorporating traffic calming features. PC1 - 3 GPI/ER 15-12 (City-wide LUCE update) 9-17-2014 & 9-18-2014 Financial information & CE Chapters 6-1 3.2.4 Circulation Element – Chapter 9: Street Network Changes Chapter 9 provides policy modification to require public participation in the planning and design of major changes to the street network and modified implementation policy to sequence street projects so development does not precede needed infrastructure improvements. 3.2.5 Circulation Element – Chapter 10: Truck Transportation Truck transportation policy modifications include policies to require use of established truck routes and include a new policy that the City shall adopt an ordinance regulating the movement of heavy vehicles. 3.2.6 Circulation Element – Chapter 12: Rail Transportation Modifications to Chapter 12 includes policies encouraging increased availability of passenger rail service and to enhance City transit service to transit station and to work with the train station management to upgrade the facility and visitor services. 3.2.7 Circulation Element – Chapter 13: Parking Management Chapter 13 includes updated policies which clarify and update language related to short term parking, establishment of park and ride lots, curb parking evaluation, and the approval and construction of public parking structures. 3.2.8 Circulation Element – Chapter 14: Neighborhood and Parking Management This Chapter includes additional policies to protect residential neighborhoods from parking demand generated by adjacent high-intensity uses and for the City to update the review criteria and clarify the process for establishing neighborhood parking districts. 3.2.4 Circulation Element – Chapter 15: Scenic Roadways This Chapter addresses policy direction for development along scenic roadways including signage, lighting, and other public equipment and facilities. 3.2.4 Circulation Element - Chapter 16: Circulation Element Implementation, Program Funding and Management Chapter 16 policies provide additional emphasis on how the City’s financial decisions should support and align with the circulation policies and programs, and encourages the City to continue to actively participate in regional transportation issues. September 18, 2014 General Plan Diagram and Zoning changes Physical changes to land uses have been discussed and endorsed through policy direction and as part of the FEIR for the LUCE. While some of the larger areas supporting changed land uses will require subsequent planning efforts to locate revised designations and zoning, there are several smaller areas for which revisions to the General Plan and zoning designations are envisioned and have been evaluated. These include: Foothill/Santa Rosa area; Sunset-Prado PC1 - 4 GPI/ER 15-12 (City-wide LUCE update) 9-17-2014 & 9-18-2014 Financial information & CE Chapters 6-1 area, Tank Farm/Broad, South Broad Street Area, General Hospital, Madonna Inn area, Alrita, Bishop Knoll, Cal Poly/CalFire, Bella Vista, and Creekside (LOVR). The table below indicates the recommended designation changes and associated zoning: Area General Plan Designation Associated Zoning Alrita area: Change from Interim Open Space to Low Density Residential R-1 Low Density Residential Bella Montana area: Change from Interim Open Space to Medium Density Residential R-2 Medium Density Residential Bishop Knoll / Foothill area: Change from Interim Open Space to Low Density Residential R-1 Low Density Residential Cal Poly/Calfire area: Change from Interim Open Space to Public Facilities PF Public Facilities Creekside/LOVR area: Change from Interim Open Space to Low (south side) and Medium (north side) Density Residential and Open Space R-1 and R-2 Low (south side) and Medium (north side) Density Residential Foothill/Santa Rosa area: Change from Neighborhood Commercial to Community Commercial on both sides of Foothill between Chorro and Santa Rosa. Retain existing General Retail. C-C Community Commercial. General Hospital area: Change from Low Density Residential to Low and Medium density Residential and Public Facilities R-1 Low Density Residential, R-2 Medium Density Residential, and PF Public Facilities Madonna Inn area: Change from Interim Open Space to Tourist Commercial, Agriculture and Open Space C-T Tourist Commercial and C/OS Conservation/Open Space South Broad Street area: Change from Services and Manufacturing to Community Commercial and Services and Manufacturing C-C Community Commercial and C-S Service Commercial Sunset Drive- in/Prado area: Change Office, Interim Open Space and Services and Manufacturing to Office* and Community Commercial O Office and C-C Community Commercial Tank Farm/Broad area: Change from Business Park to Community Commercial C-C Community Commercial * Staff recommends keeping a portion of the area in an Office designation to accommodate the RTA and Homeless Services Center developments. With Planning Commission recommendation, staff will prepare the Land Use Element diagram and the Zoning Map for Council consideration. The General Plan Land Use Diagram shown in Figure 3 on page 19 of the Draft Land Use Element has minor errors for which corrections need to be made. Corrections needed are shown in Attachment 5. This attachment contains PC1 - 5 GPI/ER 15-12 (City-wide LUCE update) 9-17-2014 & 9-18-2014 Financial information & CE Chapters 6-1 enlarged graphics for each area needing correction and displays the incorrect image on the left and the corrected image on the right. Updated diagrams will be distributed to the Commission prior to next week’s meeting. 4.0 PROJECT ANALYSIS The Commission should review the Financial Report and draft Circulation Element chapters along with updates provided by staff during the hearing and provide input and direction as appropriate. Staff will forward the Planning Commission’s recommendation for consideration by the City Council. Upcoming Council Review of LUCE recommendations from the Planning Commission include: September 30th Land Use Element Chapter 7 (Airport), Airport Overlay Zone, Land Use Element Chapter 8 (Special Focus Areas), and Circulation Element Chapter 11 (Air Transportation) October 7th Financial Report Land Use Element Chapters 1-6 & 9-12 Circulation Element Chapters 1-10 & 12-16 October 21st LUCE adoption Potential Airport Overrule determination Airport Overlay Zone (dependent on item above) Fiscal/PFFP EIR Addendum, as required Land Use Element diagram and Zoning Map 5.0 OTHER DEPARTMENT COMMENTS Public Works staff has been directly involved and assisting in the update of the Circulation Element. All departments have contributed to the background reports and the review of technical information. 6.0 ALTERNATIVES Continue the project with specific direction to staff. 7.0 ATTACHMENTS 1. LUCE Update financial report 2. Matrix of policy comments received during EIR comment period 3. Resolution recommending updates to Circulation Element Chapters 6-10 and 12-16 4. Resolution recommending updates to the Land Use Element diagram and Zoning Map 5. Graphic of areas of change PC1 - 6 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis 1 August 2014 PC1 - 7 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 2 Administrative Draft Fiscal Analysis August 2014 Table of Contents Introduction .................................................................................................................................................. 3 Major Findings .............................................................................................................................................. 3 LUCE Projected Development ........................................................................................................... 5 Discussion of Fiscal Impacts ............................................................................................................... 9 Public Facilities Financing .................................................................................................................. 21 Appendix A: Methodology for the Fiscal Analysis .............................................................. 28 Appendix B: Development Impact Fee Estimates ............................................................... 37 PC1 - 8 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis 3 August 2014 Introduction This report evaluates the fiscal impact of proposed land uses in the City of San Luis Obispo Land Use and Circulation Element (LUCE) Update. The report calculates the projected City revenues and costs that would be generated by new development included in the LUCE, as well as new infrastructure and program elements included in the Circulation Element. The first section of the report focuses primarily on the annual operating costs and revenues for the City’s General Fund, while the second section discusses capital improvements, such as street improvements and the new fire station that would also be needed to support planned development. Appendix A provides a detailed description of the methodology used in the analysis while Appendix B provides detailed calculations of development impact fees from LUCE development. The LUCE Background Report Chapter 2.2, Fiscal-Financial, provides a context for this analysis in terms of recent trends in City finances and the City’s policy framework for budgetary actions. In addition, Chapter 2.3, Economic Development, includes a retail market analysis and a discussion of the tourism market in San Luis Obispo that provides a basis for parts of the fiscal analysis in this report. The DEIR also provides a more detailed description of key City services, such as police and fire protection, than is provided here in the fiscal analysis. The General Fund collects all general tax revenues and pays for most of the operating expenses to fund City government. The City budget includes other funds besides the General Fund but these represent monies collected from a variety of revenue sources that are limited to specific uses. For example, the City Enterprise Funds are used to operate the water and wastewater systems as well as City-owned parking facilities and transit services. The revenues used to operate these systems are mainly user charges billed to customers for service. The City has the ability to adjust service charges over time to ensure that the revenues meet operating costs. Therefore, it is less likely that new development would create adverse fiscal impacts on the Enterprise Fund provided the City is able to project changes in systems demands and operating costs. However, with the General Fund, the City has less control over its major tax sources such as the property tax, sales tax and transient occupancy tax, because the tax rates are largely constrained by the state constitution and other regulatory limits and the revenues themselves may decline with changes in economic conditions, as happened during the recent recession. Therefore, it is especially important to analyze how the future land use mix will affect General Fund costs and revenues rather than other portions of the City budget. The fiscal analysis is structured to show the marginal impact of new development included in the LUCE and does not represent a projection of the total City budget at buildout of the General Plan. Other economic and state policy factors may affect the cost of services and the revenues generated by existing land uses in the City, which would change the City’s overall budget picture. Major Findings  The new development associated with the LUCE would generate a net positive fiscal impact of $3.1 million per year for the San Luis Obispo General Fund. This result is driven largely by the amount of commercial and hospitality uses included in the LUCE.  The circulation improvements and transportation programs included in the LUCE, as well as other new facilities such as a fifth fire station, would also benefit existing development in the City. The share of annual operating and maintenance costs allocated to existing development equal about $2.67 million per year, reducing the overall fiscal benefit of the LUCE program to about $452,700 per year.  The costs included in the analysis reflect a higher than current level of City expenditure for facilities maintenance and IT investments, addressing the fact that current expenditure levels have resulted in PC1 - 9 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 4 Administrative Draft Fiscal Analysis August 2014 deferred maintenance for many City facilities. These higher service standards result in higher costs for LUCE development and lower net revenues. However, despite absorbing these higher maintenance costs, the development would be able to contribute nearly an additional $3.1 million per year to capital improvement plan projects, including payments for debt service related to these projects  One source of capital improvements expenditures for the City is Measure Y sales tax receipts (1/2 cent Essential Services Measure). The LUCE development is projected to generate $2.7 million in Essential Services Measure revenues per year. Measure Y is due to expire in 2014 unless renewed by the voters. If the Measure is not renewed, the City would not receive the projected additional sales tax revenues from LUCE development and related expenditures would need to be reduced accordingly.  In terms of service costs, one significant service impact is the need for a new fire station in the south part of town, which is estimated to cost $3 million to build and equip and $1.8 million per year to operate. Four main projects included in the LUCE would benefit from this facility, including Sunset Drive-in, Avila Ranch and the Airport & Margarita Area Specific Plans. However, some existing residential units as well as a number of businesses located in the southern part of town would also benefit from the new fire station. In the fiscal analysis, the operating costs for the station have been allocated to these projects plus the existing development within the new service area.  Within the LUCE there are three major project sites plus 28 acres of other vacant land that is currently outside the City boundaries and would have to be annexed in order to develop. The City receives a lower share of property tax on annexed property than it does for properties within the historical core of the City (i.e., within the City prior to 1996 when the City/County tax sharing agreement was adopted). However, due to the planned commercial development in the Dalidio/San Luis Ranch site, the Airport Area and the Madonna site on LOVR, these future annexation areas would generate a net positive fiscal impact of $1.8 million per year.  Circulation improvements in the LUCE are estimated to cost $192.2 million, and in addition circulation improvements from the ancillary Bicycle Transportation Plan are estimated to cost $48 million. Some funding is included in the City’s existing Transportation Impact Fee (TIF) program. LUCE development is projected to pay $99 million into the existing TIF, but many of these funds are earmarked for other facilities in the Citywide TIF. Overall there is a gap of at least $40 million between LUCE circulation costs and existing projected TIF revenues, not including the costs in the Bicycle Transportation Plan.  Other estimated facilities costs associated with the LUCE include a share of both new fire and police stations at $2.2 million and $8.1 million, respectively. Also, certain LUCE development would dedicate parkland and others would pay an in-lieu parkland fee, but the City does not have a fee for park development and there is an estimated $17.3 million gap between the estimated cost of park acquisition and development and the fees and park land dedications that would be provided by the LUCE under existing City programs.  Altogether, there is an infrastructure funding gap of at least $71.5 million, and the analysis indicates that new development in the LUCE may be able to absorb some additional fee burden. When the LUCE is adopted, it will be essential for the City to develop a detailed plan for funding critical infrastructure improvements, including a new development impact fee nexus study. PC1 - 10 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis 5 August 2014 LUCE Project ed Development The proposed Land Use and Circulation Element includes a number of future development projects and sites. Table 1 summarizes housing unit, population, non-residential square footage, and employment capacity in the Planning Subarea. The table is divided into capacity from alternative sites, specific plans, planned projects, and other vacant land. Under the proposed General Plan, San Luis Obispo has a capacity for 4,904 new residential units and 5,168,908 square feet of non-residential floor area. Alternatives Sites There are 12 active alternatives sites within the Planning Subarea that were identified through the alternatives process as opportunity areas. Units and non-residential square footage are calculated based on proposed general plan designations and input from the City. Some of these sites have existing development that will likely be adapted to facilitate new development. Alternatives sites are anticipated to result in 2,316 new units and 1,900,443 square feet of new non-residential floor area. Specific Plans There are three key specific plans that provide capacity within the Planning Subarea: The Margarita Area Specific Plan (MASP), the Airport Area Specific Plan (AASP), and the Orcutt Area Specific Plan (OASP). After capacity from the Avila Ranch and Broad Street at Tank Farm Road alternatives sites were removed to avoid double counting, the three specific plan areas account for 1,847 units and 3,244,642 square feet of new non- residential floor area. Planned Projects Some capacity is determined by sites with projects approved by the City of San Luis Obispo. Planned projects include developments with approved land use entitlements, preparing for building permits, in plan check, or under construction. There are eight planned and approved projects that are outside the alternatives sites, including three residential and five mixed use developments. Together, these on-going projects would result in an estimated 289 new housing units and 126,000 square feet of non-residential floor area. Other Vacant Land Other vacant land indicates what could realistically be developed on remaining vacant land in San Luis Obispo based on actual constraints and historical development practice. Table 1 shows the breakdown of vacant land by land use designations in 2013, excluding approved projects, vacant land in specific plan areas, and vacant land within alternatives sites. Excluding these areas, the city has 87 acres of vacant land. Services and Manufacturing and Low Density Residential areas have the greatest number of vacant, developable acres. All vacant land potential is within the Planning Subarea, although 28 acres is outside the current City boundary. Based on allowed density, anticipated infrastructure, and development history, vacant land in San Luis Obispo can support an additional 452 units. Most of these units would be in low, medium, and high density residential areas. Based on allowed FAR, anticipated infrastructure, and development history, vacant land in San Luis Obispo can support an additional 230,433 square feet of non-residential development. PC1 - 11 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 6 Administrative Draft Fiscal Analysis August 2014 Table 1: Total Capacity within Planning Subarea, San Luis Obispo 2014 Acres Typical Density¹ Capacity Resin- dential (Units/ Acre) Non- Resi- dential (FAR) Units² Popula- tion3 Non-Residential Square Footage4 Employ- ment5 Single Family Multi- family Total Office Commer- cial Indust- rial Hotel Park (Acres) Total (includes hotels) ALTERNATIVES SITES⁶ Foothill @ Santa Rosa Area 0 80 80 183 0 -1,814 0 0 - -1,814 -3 Caltrans Site 0 53 53 121 -3,792 -14,265 0 200 3.5 101,943 6 General Hospital Site 9 32 41 94 48,788 0 0 0 - 48,788 163 Broad Street Area 0 589 589 1,349 0 229,068 0 0 - 229,068 416 Sunset Drive-In Site 0 0 0 0 260,706 222,962 0 0 - 483,668 1,274 Dalidio / Madonna Area 320 180 500 1,145 150,000 200,000 0 200 8.3 470,000 968 Pacific Beach Site 0 38 38 87 -94,851 57,499 0 0 - -37,352 -212 Calle Joaquin Auto Sales Area 0 0 0 0 0 128,066 0 120 - 200,066 295 Madonna Site on LOVR 0 115 115 263 16,770 145,000 0 139 - 336,170 392 LOVR Creekside Area 0 159 159 364 0 0 0 0 2.7 0 0 Broad St. @ Tank Farm Rd. Site 0 41 41 94 73,180 62,726 0 0 - 135,906 358 Avila Ranch 405 295 700 1,603 0 25,000 0 0 - 25,000 45 SUBTOTAL 734 1,582 2,316 5,303 450,801 1,054,242 0 659 14.5 1,900,443 3,762 SPECIFIC PLANS7 Margarita Area Specific Plan 741 127 868 1,988 959,017 10,000 0 0 25.9 969,017 3,215 Airport Area Specific Plan⁸ 0 0 0 0 900,000 616,983 747,642 0 - 2,264,625 6,420 Orcutt Area Specific Plan 540 439 979 2,242 0 11,000 0 0 12.0 11,000 20 SUBTOTAL 1,281 566 1,847 4,230 1,859,017 637,983 747,642 0 37.9 3,244,642 9,475 PLANNED AND APPROVED PROJECTS⁹ Chinatown Project 0 32 32 73 0 46,000 0 78 - 92,800 124 Pacific Courtyards 0 12 12 27 10,000 0 0 0 - 10,000 33 Mission Estates 10 0 10 23 0 0 0 0 - 0 0 Four Creeks (Creekston and Laurel Creek) 0 166 166 380 0 0 0 0 - 0 0 Garden Street Terrace 0 8 8 18 0 25,000 0 64 - 63,400 83 PC1 - 12 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 7 August 2014 Acres Typical Density¹ Capacity Resin- dential (Units/ Acre) Non- Resi- dential (FAR) Units² Popula- tion3 Non-Residential Square Footage4 Employ- ment5 Single Family Multi- family Total Office Commer- cial Indust- rial Hotel Park (Acres) Total (includes hotels) 313 South Street Apartments 0 43 43 98 0 0 0 0 - 0 0 Marsh Street Commons 0 11 11 25 0 3,000 0 0 - 3,000 5 ICON project (1340 Taft) 0 7 7 16 0 4,000 0 0 - 4,000 7 SUBTOTAL 10 279 289 660 10,000 78,000 - 150 - 126,400 252 OTHER VACANT LAND (BY GENERAL PLAN DESIGNATION)10 Suburban Residential4 4.0 1 4 4 9 - - - - Low Density Residential 53.4 6 320 320 733 - - - - Medium Density Residential 7.1 10 71 71 163 - - - - Medium-High Density Residential 0.4 16 - 6 6 14 - - - - High Density Residential 2.7 19 - 51 51 117 - - - - Neighborhood Commercial5 0.2 0.30 - 2,614 - - 2,614 5 Community Commercial5 3.2 0.30 - 41,818 - - 41,818 76 Tourist Commercial5 1.0 0.35 - 15,246 - - 15,246 28 Office4 1.3 0.35 - 19,820 - - 19,820 36 Services and Manufacturing 13.3 0.25 - 144,837 - - 144,837 193 Public 0.4 0.35 - 6,098 - - 6,098 20 SUBTOTAL 87 395 57 452 1,036 25,918 59,678 144,837 - - 230,433 388 TOTAL CAPACITY 2,420 11,229 2,345,736 1,829,903 892,479 803 52.4 5,166,908 13,877 1 Typical density and FAR is based on a net acre assumption accounting for necessary infrastructure and facilities. To get the typical density, the maximum density was recalculated based on a development percent assumption on what is average for new development. 2 Unit capacity for other vacant land is calculated by multiplying acres and the typical density. 3 Population based on 2010 Census estimate of 2.29 persons per household. 4Non-residential square footage for specific plan area and planned projects is based on assumptions in specific plans and Community Development Project Status Report (December 31, 2012). Non-residential square footage for vacant land is calculated by multiplying acres and the typical FAR. Hotels were assumed to have 600 square feet per room. 5 Employment is estimated using 300 square feet per employee for office uses, 550 square feet per employee for commercial uses, 750 square feet per employee for industrial uses, and 1,150 square feet per employee for hotels/motels. PC1 - 13 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 8 Administrative Draft Fiscal Analysis August 2014 6Alternatives Sites estimate the net new residential and non-residential development in opportunity areas identified as a part of the alternatives process. Units and non-residential square footage are calculated based on proposed general plan designations and input from the City. Some of these sites have existing development that will likely be adapted to facilitate new development. As a result, some sites have a negative number for net new non-residential square footage, even though new development is anticipated. 7Non-Residential square footage includes land designated neighborhood commercial, services commercial, business park, and manufacturing. 8The Airport Area Specific Plan (AASP) does not include capacity from the Avila Ranch or Broad St. @ Tank Farm Alternatives Sites. These sites are counted in the Alternatives Sites section. Non-residential square footage in the AASP includes 605,293 square feet from underutilized land that is likely to redevelop. Remaining capacity in the AASP based on analysis conducted by the City of San Luis Obispo Planning and GIS staff. 9Does not include projects that fall within the boundaries of the Specific Plan Areas or the Alternatives Sites. Only those projects that provided specific unit/square footage numbers were included. 10Does not include parcels that fall within the boundaries of the Specific Plan Areas, Alternatives Sites, or Planned and Approved Projects. Acreages are taken from the vacant land category in the existing land use inventory. Sources: Community Development Department Project Status Report (December 31, 2012), San Luis Obispo General Plan, Land Use Element, 2010; City of San Luis Obispo, 2014; Matrix, 2014; Mintier Harnish, 2014. PC1 - 14 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 9 August 2014 Discussion of Fiscal Impacts Introduction Overall, the new land use development under the LUCE would result in a net positive fiscal impact of $3.1 million per year for the San Luis Obispo General Fund (Table 2). However, other costs associated with the new circulation improvements and transportation programs, as well as added fire protection costs to existing development in the south part of the City would reduce the total net revenues to $452,700 per year (Table 3). The positive fiscal impact is driven largely by a favorable balance of commercial and hospitality uses to residential development. Retail development would create a net positive revenue balance of $6.4 million per year and the added hotel development would increase net revenues by $2.6 million per year. Residential development, on the other hand, would require an estimated $4.0 million more per year in service costs than it would generate in City revenues. Office and industrial development also would have more minor negative fiscal impacts on the City General Fund. Table 2 shows the detailed impacts of LUCE development on City revenue categories and service departments. Most of the property tax is generated by residential development while most of the sales tax is generated by commercial development, although household spending from residential units has been credited to the new single family and multi-family units. The transient occupancy tax is a major source of revenue from the hospitality sector. The Net Revenue shown in Table 2 represents about 15.5 percent of the total projected revenues of nearly $20.0 million. The City has a fiscal policy to maintain a 20 percent reserve and the LUCE land use mix would allow the City to maintain its reserves over time. As discussed in the analysis below, the fiscal analysis uses a higher service standard for infrastructure and facilities maintenance than the City currently is able to budget, addressing the fact that current expenditure levels have resulted in deferred maintenance for many City facilities. These higher service standards result in higher costs for LUCE development and lower net revenues in the bottom line in Table 2. However, despite absorbing these higher maintenance costs, the development would be able to contribute nearly an additional $3.0 million per year to capital improvement plan projects, including payments for debt service related to these projects (shown in Table 2 as Transfers Out). This allocation reflects the current General Fund budget for capital expenditures. In the future, the City Council may choose to allocate these funds differently to augment other service departments as needed. Much of the General Fund contribution to capital expenditures is currently funded by Measure Y sales tax revenues (1/2 cent Essential Services Sales Tax), the renewal of which is due to be voted on in November 2014. The LUCE development is projected to generate nearly $2.7 million per year in Essential Services sales tax revenues. If the measure is not renewed, the City would not gain the revenues shown for the LUCE development and would also likely have to reduce expenditures by a commensurate amount. City Services The following sections discuss the projected impacts to each governmental function funded by the General Fund. General Government. The General Government function includes a number of City Departments that provide management and support services, including the Administration Department, City Attorney, Human Resources, Finance and Information Technology, Public Works Administration, and Building and Fleet Maintenance (City Council costs are not projected to increase as a result of the LUCE). These costs total $10.3 million in the General Fund Budget, but some of the costs would not reasonably be expected to increase as PC1 - 15 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 10 Administrative Draft Fiscal Analysis August 2014 the City grows. For example, the City would not have two City Managers or two Finance Directors, but rather would hire additional support personnel to meet additional workloads. Therefore, some of the General Government costs have been excluded from the analysis (see Table A-6 in Appendix A). In contrast, the City also estimates that it is not currently spending enough to maintain important infrastructure and systems. In terms of General Government functions, the City estimates it should be allocating an additional $160,000 per year to maintain and expand information technology systems, as well as an additional $867,000 per year for building maintenance.1 These amounts have been added to the General Government expenditures to reflect the service level the City projects for future growth. The adjustments to General Government expenditures results in a total cost basis for the fiscal analysis of $8.8 million, which represents 18.2 percent of the total service cost basis in the fiscal analysis. The General Government service costs are allocated to each land use using this percentage of the other line department costs discussed above. Police Department. In terms of service costs, the largest impact is for additional police officers, at nearly $4.1 million per year. As of 2014, the City has 59 sworn officers, a ratio of about 1.24 officers per 1,000 population. Residential development envisioned in the LUCE will add about 11,200 residents, creating a need for 14 new sworn officers in order to maintain the same per capita ratio. The City currently spends about $101,800 plus $1,500 in equipment for new police officer hires. However, as the police department expands, additional non-sworn support personnel are also needed as well as additional operating and management expenditures. The financial impact of the LUCE on a residential population basis would be about $2.5 million per year. However, the LUCE also includes a substantial increase in commercial and hospitality uses, which have significant fiscal benefits but also require added police protection services. This added service demand is estimated to cost an additional $1.6 million per year. Fire Department. For fire protection, there is a need for a new fire station in the south part of town. The annual cost of operating the fire station is estimated to be $1.8 million, derived from figures in the Fire Master Plan, escalated to 2014 dollars.2 Based on the DEIR analysis, it is anticipated that four new projects would benefit from this facility: Sunset Drive-in, Avila Ranch and the Airport & Margarita Area Specific Plans in addition to certain existing development in the City. The three new projects include 1,568 dwelling units and an estimated 10,754 new jobs when fully built out. The existing developed areas in San Luis Obispo that would also be served by the new fire station include an estimated 2,200 dwelling units and businesses with about 4,000 jobs. The fiscal analysis estimates that approximately $1,121,700 of the operating cost for the station (62 percent of the total $1.8 million) would be due to the new development projects, based on a combination of population, employment and projected assessed value, which is an indicator of the level of fire protection they would require. These projects would cover this cost, and other City service costs, through payment of property taxes and sales taxes, along with other General Fund revenues shown in Table 2. The remaining $678,300 would be a cost to the City to meets its service standards for the existing development in the south part of the City. For LUCE development projects in other parts of the City within adequate response times of current stations, no additional fire protection costs are included in the analysis. However, all projects would generate increased costs for emergency medical response on a per capita basis, which accounts for about two-thirds of 1 IT costs provided by Wayne Padilla, Finance/IT Director; Building maintenance costs provided by Daryl Grigsby, Public Works Director, in a memorandum to the Local Revenue Measure Advisory Committee, January 13, 2014. The stated cost reflects the alternative investment level. 2 This estimate also accounts for projected reductions in PERS costs for new firefighters, based on information provided by Wayne Padilla, Finance/IT Director, August 14, 2014. PC1 - 16 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 11 August 2014 the Fire Department Budget. The projected additional cost for fire services from existing stations is estimated at 759,250 per year. Transportation. The LUCE proposes a number of new street and highway improvements, as well as a significant expansion of the City’s Transportation Planning and Engineering program to increase bicycle, pedestrian, and transit mode share. Also the City recently adopted an ancillary document, the Bicycle Transportation Plan, which includes a number of bicycle specific improvements. Over 25 new transportation policies and programs are proposed which include new monitoring programs, new budgeting and prioritization processes, development of new plans such as the downtown pedestrian plan and access management standards, expansion of existing programs such as the Neighborhood Traffic Calming and Traffic Operations Programs, and new Multimodal Service Standards. It’s estimated that the proposed expansion of the City’s Transportation Planning & Engineering program represents an additional 5,000 to 8,000 annual staff hours & approximately $200,000 in annual consultant services depending on the implementation schedule for these projects and programs and the level of the development applicants in a given year. The City currently averages about $15,000 in maintenance costs per mile of roadway, including sidewalks, bike paths, and related storm drain facilities. The LUCE includes approximately 13 miles of new road surfaces, which would increase current maintenance costs about $195,000 on an annual average basis. Also the Bicycle Transportation Plan includes new bike paths, boulevards, and lanes which would increase current maintenance cost by another $1.06 million on an annual average basis. However, the City has determined that current expenditures levels fail to meet City Council goals regarding optimal maintenance and replacement schedules and the City is accumulating a significant deferred maintenance need. Maintenance levels would need to increase between 3 and 5 times current levels to avoid this deferred maintenance.3 At even the lower level, this would increase the LUCE street/storm maintenance costs to about $585,000 per year. The combination of an expanded Transportation Planning & Engineering program and additional street maintenance on new roads and bikeways, adds a total of $2,213,500 to the fiscal costs for the LUCE. In addition, the analysis estimates that the increased use of existing City transportation facilities and programs by the new population and employment would increase City Transportation function costs by another $1,586,600. Leisure, Cultural and Social Services. A number of the LUCE development projects include new parks, adding 52.4 acres to the City’s inventory in aggregate. While this is a benefit to residents of the City, the additional parks will increase maintenance costs for the parks and recreation department. In addition, the new residential population will use existing parks and the increased wear and tear will add maintenance costs for those parks as well. The total impacts to park maintenance cost is estimated at about $578,400 and is allocated to the new residential units in the LUCE. In addition to parks and landscape maintenance, new development associated with the LUCE would increase demand for recreation programs and other City leisure, cultural and social services, including potentially the City-County Library, the Swim Center, Youth and general Community Services. It is estimated that the total cost of such services would increase $1.2 million at full buildout of the LUCE. Portions of these costs would be offset by recreation program fees and general tax revenues generated by the LUCE development. Community Development. The Community Development function for the City includes a wide range of services, from long range planning to development review and entitlements, carried out by the Community Development Department. It also includes economic development, community promotions, tourism and 3 Grigsby, Daryl, Public Works Director, memorandum to the Local Revenue Measure Advisory Committee, January 13, 2014. PC1 - 17 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 12 Administrative Draft Fiscal Analysis August 2014 natural resource protection through the City Administration Department, neighborhood services and code enforcement through the Building and Safety Division, as well as engineering review and CIP engineering from the Public Works Department. In the fiscal analysis, we have not included the portions of the development review process for which the City charges fees directly to development. Fees for plan review, plan check, building permits and the like are paid during the entitlement and project approval phase but then are not paid by development on an ongoing basis except for occasional remodels or building expansions. Much like the Enterprise Funds, the City has the ability to set fees for entitlement services to cover City costs; however, other community development functions are supported by general tax revenues and are included in the fiscal cost analysis for the LUCE, estimated at $719,170 per year at full buildout. Enterprise Funds. Parking and transit services which are part of the transportation function are funded by separate enterprise funds and are not included in Table 2. Similarly, utilities such as water and sewer service are funded by enterprise funds rather than through general tax revenues in the General Fund. For water, sewer and parking services, user fees and service charges fund 97-99 percent of the costs for these functions. Therefore, as demand for the services increases from LUCE development, the City will receive increased service charge revenues to cover those costs, In addition, the City has the authority to increase service charge rates if necessary to maintain pace with cost escalations. For transit, however, only 20 percent of operating costs are covered by user revenues and 80 percent are covered from subventions and grants that are based on population, ridership and other factors. The LUCE would increase the City’s population by about 25 percent, potentially increasing transit costs by as much as $800,000 if existing system capacity cannot handle the increase. If such cost increases do occur, the City would need to obtain additional grant funds to operate the expanded services. Impacts by LUCE Development Area The fiscal analysis evaluates each development project/area and land use type individually. Table 4 shows the bottom-line fiscal impact of each individual project site or area, grouped by LUCE category. Due to the balance of commercial and residential development, each category of LUCE project has a positive fiscal impact. Several of the projects would involve redeveloping existing non-residential uses and the fiscal impact analysis accounts for the loss of these uses. For example, the site at Foothill and Santa Rosa would demolish an 1,800 sq.ft. commercial building while the Caltrans site would lose 18,000 sq.ft. of office and commercial uses. In addition, the Pacific Beach site would replace 94,951 sq.ft. of office space with $57,499 sq.ft. of retail space plus 38 multi-family units. The analysis assumes the existing uses are functioning as new and shows a negative impact from replacing retail uses but a positive impact from replacing the office uses. In reality the fiscal effect of the existing uses is likely lower due to obsolescence of the existing buildings. In any case, both Caltrans site and the Pacific Beach site have net positive fiscal impacts due to the planned mix of uses in each project. In most cases, projects that have a mix of both residential and commercial uses show a positive fiscal benefit, depending on the amount of retail uses in each case. There are a number of positive attributes associated with mixed use development in terms of creating vibrant neighborhood environments, allowing more pedestrian oriented shopping and entertainment activities and reducing vehicle miles traveled to more centralized commercial centers. The fiscal analysis does not explicitly value these benefits in terms of increased revenues or reduced service costs, but it does make the assumption that commercial spaces in neighborhood locations will be fully patronized by local residents and therefore contribute positively to City revenues, mainly through the sales tax. Some neighborhood sales dollars will likely come from existing PC1 - 18 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 13 August 2014 residents and not just residents in the new housing. This would represent shifts in sales away from existing, more centralized retail centers in the City and a more detailed market analysis of each individual project would be needed to calculate the true net effect of this shopping activity. However, the fiscal success of the City is largely dependent on its ability to continue to attract regional retail spending from residents throughout the County and from business and tourist visitors. This may occur both through sales expansion of existing retail and hospitality businesses (increased sales capture) and also through the development of new retail and hotels that attract future county and outside visitor shoppers as the regional population continues to grow. The LUCE includes potential expansion of regional retail centers in the Madonna Rd. and LOVR areas, and therefore would help to maintain a solid tax base for the City as older retail centers transition to new mixed use developments. Tables 5 to 8 show detailed costs and revenues for each LUCE category plus the annexation areas. The Alternatives Sites include a substantial portion of the new commercial development included in the LUCE but less than half of the new housing units. This group of sites provides the largest net revenue gain for the City. Among the Specific Plans, the residential development in the Margarita and Orcutt areas is balanced by the commercial in the Airport Area to create a net positive fiscal impact overall. The other planned and approved projects, as well as the remaining vacant land with development potential, have mixed fiscal impacts depending on the nature of the proposed project, but as a group result in a net positive fiscal benefit for the City. Within the LUCE there are three major project sites plus 28 acres of other vacant land that are currently outside the City boundaries and would have to be annexed in order to develop. These sites include Dalidio/San Luis Ranch, portions of the Airport Area Specific Plan and the Madonna site on LOVR. They are spread among the various LUCE project categories but are extracted for separate analysis in Table 3 and 7. The City receives a lower share of property tax on annexed property than it does for properties within the historical core of the City (i.e., within the City prior to 1996 when the City/County tax sharing agreement was adopted). However, due to the planned commercial development in the Dalidio/San Luis Ranch site, the Airport Area and the Madonna site on LOVR, these future annexation areas would generate a net positive fiscal impact of $1.8 million per year. PC1 - 19 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Table 2: Detailed Fiscal Impacts of Total New LUCE Development Total Single Family Multi-Family Office Commercial Industrial Hotel REVENUES Tax Revenues Property Tax $2,310,082 $1,088,465 $713,256 $91,634 $309,921 $22,587 $84,219 Property Tax in lieu of VLF $1,781,322 $795,457 $384,503 $248,092 $246,538 $54,253 $52,479 Sales Tax: General $6,150,569 $512,576 $396,753 $77,364 $4,473,247 $61,871 $628,760 Sales Tax: ½ cent Essential Services Measure $2,666,431 $222,215 $172,002 $33,539 $1,939,268 $26,823 $272,584 Sales Tax: Public Safety $135,399 $11,284 $8,734 $1,703 $98,474 $1,362 $13,842 Transient Occupancy Tax $2,283,266 $0 $0 $0 $0 $0 $2,280,447 Utility Users Tax $1,521,497 $454,799 $466,827 $320,846 $136,523 $48,829 $93,673 Franchise Fees $717,541 $214,484 $220,157 $151,312 $64,384 $23,028 $44,177 Business Tax Certificates $1,011,023 $0 $0 $619,825 $263,740 $94,330 $33,128 Real Property Transfer Tax $52,735 $24,848 $16,282 $2,092 $7,075 $516 $1,923 Service Charges Recreation Fees $389,560 $192,238 $197,322 $0 $0 $0 $0 Other Charges for Services $466,264 $139,374 $143,059 $98,324 $41,837 $14,964 $28,706 Other Revenue Fines and Forfeitures $44,315 $13,247 $13,597 $9,345 $3,976 $1,422 $2,728 Interest Earnings and Rents $65,346 $12,616 $9,554 $5,457 $24,934 $1,153 $11,623 Other Revenues $27,441 $8,109 $8,324 $6,748 $2,872 $1,027 $361 Transfers in Gas Tax/TDA $328,782 $162,246 $166,536 $0 $0 $0 $0 TOTAL REVENUES $19,951,573 $3,851,957 $2,916,906 $1,666,281 $7,612,789 $352,164 $3,548,648 EXPENDITURES General Government $2,549,489 $813,329 $821,112 $454,429 $239,595 $69,596 $151,427 Police $4,188,315 $1,218,254 $1,250,472 $689,699 $548,547 $104,964 $376,379 Fire $1,880,919 $595,480 $534,342 $406,239 $176,733 $64,274 $103,850 Transportation $2,544,883 $760,705 $780,823 $536,653 $228,350 $81,672 $156,680 Leisure, Cultural and Social Services $1,232,271 $551,991 $566,589 $0 $0 $0 $113,692 Park and Landscape Maintenance $578,381 $285,416 $292,964 $0 $0 $0 $0 Community Development Economic Health $178,344 $0 $0 $105,868 $45,047 $16,112 $11,317 Development Review $183,061 $56,942 $58,448 $40,171 $17,093 $6,113 $4,294 Other Community Development $399,943 $124,404 $127,694 $87,763 $37,344 $13,356 $9,381 Transfers Out $3,093,957 $962,390 $987,841 $678,935 $288,892 $103,325 $72,575 TOTAL EXPENDITURES $16,829,562 $5,326,048 $5,366,799 $2,368,925 $1,715,467 $483,965 $981,685 TOTAL BUDGET NET (DEFICIT)/SURPLUS $3,122,011 ($1,567,568) ($2,449,893) ($1,012,593) $6,372,458 ($131,801) $2,566,964 Source: ADE, Inc. Table 3: Detailed Fiscal Impacts of Total New LUCE Development Plus Costs Allocated to Existing Development PC1 - 20 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 15 August 2014 Total Single Family Multi-Family Office Commercial Industrial Hotel REVENUES Tax Revenues Property Tax $2,310,082 $1,088,465 $713,256 $91,634 $309,921 $22,587 $84,219 Property Tax in lieu of VLF $1,781,322 $795,457 $384,503 $248,092 $246,538 $54,253 $52,479 Sales Tax: General $6,150,569 $512,576 $396,753 $77,364 $4,473,247 $61,871 $628,760 Sales Tax: ½ cent Essential Services Measure $2,666,431 $222,215 $172,002 $33,539 $1,939,268 $26,823 $272,584 Sales Tax: Public Safety $135,399 $11,284 $8,734 $1,703 $98,474 $1,362 $13,842 Transient Occupancy Tax $2,283,266 $0 $0 $0 $0 $0 $2,280,447 Utility Users Tax $1,521,497 $454,799 $466,827 $320,846 $136,523 $48,829 $93,673 Franchise Fees $717,541 $214,484 $220,157 $151,312 $64,384 $23,028 $44,177 Business Tax Certificates $1,011,023 $0 $0 $619,825 $263,740 $94,330 $33,128 Real Property Transfer Tax $52,735 $24,848 $16,282 $2,092 $7,075 $516 $1,923 Service Charges Recreation Fees $389,560 $192,238 $197,322 $0 $0 $0 $0 Other Charges for Services $466,264 $139,374 $143,059 $98,324 $41,837 $14,964 $28,706 Other Revenue Fines and Forfeitures $44,315 $13,247 $13,597 $9,345 $3,976 $1,422 $2,728 Interest Earnings and Rents $65,346 $12,616 $9,554 $5,457 $24,934 $1,153 $11,623 Other Revenues $27,441 $8,109 $8,324 $6,748 $2,872 $1,027 $361 Transfers in Gas Tax/TDA $328,782 $162,246 $166,536 $0 $0 $0 $0 TOTAL REVENUES $19,951,573 $3,851,957 $2,916,906 $1,666,281 $7,612,789 $352,164 $3,548,648 EXPENDITURES General Government1 $2,953,854 $813,329 $821,112 $454,429 $239,595 $69,596 $151,427 Police $4,188,315 $1,218,254 $1,250,472 $689,699 $548,547 $104,964 $376,379 Fire1 $2,559,250 $595,480 $534,342 $406,239 $176,733 $64,274 $103,850 Transportation1 $4,131,467 $760,705 $780,823 $536,653 $228,350 $81,672 $156,680 Leisure, Cultural and Social Services $1,232,271 $551,991 $566,589 $0 $0 $0 $113,692 Park and Landscape Maintenance $578,381 $285,416 $292,964 $0 $0 $0 $0 Community Development Economic Health $178,344 $0 $0 $105,868 $45,047 $16,112 $11,317 Development Review $183,061 $56,942 $58,448 $40,171 $17,093 $6,113 $4,294 Other Community Development $399,943 $124,404 $127,694 $87,763 $37,344 $13,356 $9,381 Transfers Out $3,093,957 $962,390 $987,841 $678,935 $288,892 $103,325 $72,575 TOTAL EXPENDITURES $19,498,843 $5,326,048 $5,366,799 $2,368,925 $1,715,467 $483,965 $981,685 TOTAL BUDGET NET (DEFICIT)/SURPLUS $452,730 ($1,567,568) ($2,449,893) ($1,012,593) $6,372,458 ($131,801) $2,566,964 1 The total expenditures for General Government, Fire Protection and Transportation include costs allocated to existing development as well as LUCE development. PC1 - 21 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Table 4: Summary of Impacts by Area Area Total Single Family Multi-Family Office Commercial Industrial Hotel ALTERNATIVES SITES $4,555,809 ($469,983) ($1,538,826) ($182,496) $4,649,900 $0 $2,094,888 Foothill @ Santa Rosa ($98,887) $0 ($90,617) $0 ($8,271) $0 $0 Caltrans Site $545,236 $0 ($43,761) $1,016 ($65,038) $0 $652,313 General Hospital Site ($42,182) ($1,568) ($27,545) ($13,068) $0 $0 $0 Broad St. Area $483,000 $0 ($542,623) $0 $1,025,623 $0 $0 Sunset Drive In $923,109 $0 $0 ($81,191) $1,004,300 $0 $0 Dalidio/Madonna $954,666 ($207,497) ($196,154) ($87,126) $830,384 $0 $614,352 Pacific Beach Site $256,186 $0 ($31,376) $25,406 $262,155 $0 $0 Calle Joaquin Auto Sales $966,657 $0 $0 $0 $579,369 $0 $386,865 Madonna Site on LOVR $948,649 $0 ($119,457) ($6,905) $633,163 $0 $441,358 LOVR Creekside ($131,282) $0 ($131,282) $0 $0 $0 $0 Broad St. @ Tank Farm Rd. $229,450 $0 ($34,880) ($20,629) $284,959 $0 $0 Avila Ranch ($478,793) ($260,918) ($321,131) $0 $103,256 $0 $0 SPECIFIC PLANS ($2,030,280) ($904,027) ($641,827) ($1,139,335) $766,706 ($111,797) $0 Margarita Area ($1,177,349) ($498,548) ($140,701) ($579,402) $41,302 $0 $0 Airport Area $8,214 $0 $0 ($559,933) $679,944 ($111,797) $0 Orcutt Area ($861,145) ($405,478) ($501,126) $0 $45,460 $0 $0 PLANNED/APPROVED PROJ. $517,762 ($4,280) ($273,895) ($3,732) $345,002 $0 $454,166 Chinatown $421,795 $0 ($31,415) $0 $203,463 $0 $249,471 Pacific Courtyards ($15,513) $0 ($11,780) ($3,732) $0 $0 $0 Mission Estates ($4,280) ($4,280) $0 $0 $0 $0 $0 Four Creeks ($162,963) $0 ($162,963) $0 $0 $0 $0 Garden St. Terrace $307,645 $0 ($7,854) $0 $110,578 $0 $204,694 313 South St Apts. ($42,213) $0 ($42,213) $0 $0 $0 $0 Marsh St. Commons $2,471 $0 ($10,799) $0 $13,269 $0 $0 ICON (1340 Taft) $10,821 $0 ($6,872) $0 $17,692 $0 $0 OTHER VACANT LAND $78,720 ($138,665) ($48,832) ($7,912) $269,580 $4,548 $0 GRAND TOTAL1 $3,122,011 ($1,516,954) ($2,503,380) ($1,333,475) $6,031,188 ($107,249) $2,549,053 ANNEXATION AREAS $1,819,280 ($299,746) ($315,611) ($653,963) $2,143,492 ($111,797) $1,055,709 1Grand Total does not include $2.67 million in costs allocated to existing development. Source: ADE, Inc. PC1 - 22 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 17 August 2014 Table 5: Detailed Fiscal Impacts for Alternatives Sites Total Single Family Multi-Family Office Commercial Industrial Hotel REVENUES Tax Revenues Property Tax $1,230,863 $317,140 $498,541 $82,551 $267,066 $0 $65,566 Property Tax in lieu of VLF $756,877 $251,066 $256,372 $51,542 $153,179 $0 $44,717 Sales Tax: General $4,247,481 $155,467 $252,682 $14,868 $3,307,170 $0 $517,294 Sales Tax: ½ cent Essential Services Measure $1,841,393 $67,399 $109,544 $6,446 $1,433,743 $0 $224,260 Sales Tax: Public Safety $93,504 $3,422 $5,563 $327 $72,804 $0 $11,388 Transient Occupancy Tax $1,878,492 $0 $0 $0 $0 $0 $1,876,173 Utility Users Tax $652,634 $137,943 $297,311 $61,660 $78,653 $0 $77,067 Franchise Fees $307,784 $65,054 $140,212 $29,079 $37,093 $0 $36,345 Business Tax Certificates $298,318 $0 $0 $119,117 $151,946 $0 $27,255 Real Property Transfer Tax $28,098 $7,240 $11,381 $1,884 $6,097 $0 $1,497 Service Charges Recreation Fees $183,976 $58,307 $125,670 $0 $0 $0 $0 Other Charges for Services $200,000 $42,273 $91,111 $18,896 $24,103 $0 $23,617 Other Revenue Fines and Forfeitures $19,009 $4,018 $8,660 $1,796 $2,291 $0 $2,245 Interest Earnings and Rents $39,119 $3,815 $6,271 $1,280 $18,191 $0 $9,555 Other Revenues $11,009 $2,460 $5,301 $1,297 $1,654 $0 $297 Transfers in Gas Tax/TDA $155,273 $49,210 $106,063 $0 $0 $0 $0 TOTAL REVENUES $11,943,832 $1,164,815 $1,914,682 $390,743 $5,553,990 $0 $2,917,276 EXPENDITURES General Government $1,119,202 $247,653 $523,167 $86,839 $136,959 $0 $124,583 Police $1,924,128 $369,503 $796,396 $132,546 $316,028 $0 $309,655 Fire $784,115 $186,023 $341,546 $75,312 $95,795 $0 $85,440 Transportation $1,091,608 $230,726 $497,288 $103,133 $131,557 $0 $128,904 Leisure, Cultural and Social Services $621,805 $167,422 $360,847 $0 $0 $0 $93,537 Park and Landscape Maintenance $273,150 $86,568 $186,582 $0 $0 $0 $0 Community Development Economic Health $55,609 $0 $0 $20,346 $25,953 $0 $9,311 Development Review $75,595 $17,271 $37,224 $7,720 $9,848 $0 $3,533 Other Community Development $165,157 $37,732 $81,325 $16,866 $21,515 $0 $7,718 Transfers Out $1,277,653 $291,898 $629,132 $130,477 $166,436 $0 $59,709 TOTAL EXPENDITURES $7,388,023 $1,634,798 $3,453,507 $573,239 $904,090 $0 $822,388 TOTAL BUDGET NET (DEFICIT)/SURPLUS $4,555,809 ($469,983) ($1,538,826) ($182,496) $4,649,900 $0 $2,094,888 Source: ADE, Inc. PC1 - 23 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Table 6: Detailed Fiscal Impacts for Specific Plan Areas Total Single Family Multi-Family Office Commercial Industrial Hotel REVENUES Tax Revenues Property Tax $606,038 $505,201 $100,838 $0 $0 $0 $0 Property Tax in lieu of VLF $798,420 $404,527 $80,743 $192,770 $75,526 $44,854 $0 Sales Tax: General $1,209,051 $271,326 $90,403 $61,311 $734,180 $51,830 $0 Sales Tax: ½ cent Essential Services Measure $524,155 $117,627 $39,192 $26,580 $318,286 $22,470 $0 Sales Tax: Public Safety $26,616 $5,973 $1,990 $1,350 $16,162 $1,141 $0 Transient Occupancy Tax $0 $0 $0 $0 $0 $0 $0 Utility Users Tax $689,889 $240,743 $106,370 $254,273 $47,598 $40,905 $0 Franchise Fees $325,353 $113,535 $50,164 $119,916 $22,447 $19,291 $0 Business Tax Certificates $662,189 $0 $0 $491,217 $91,951 $79,021 $0 Real Property Transfer Tax $13,835 $11,533 $2,302 $0 $0 $0 $0 Service Charges Recreation Fees $146,720 $101,759 $44,961 $0 $0 $0 $0 Other Charges for Services $211,417 $73,776 $32,597 $77,922 $14,586 $12,535 $0 Other Revenue Fines and Forfeitures $20,094 $7,012 $3,098 $7,406 $1,386 $1,191 $0 Interest Earnings and Rents $17,649 $6,385 $1,947 $4,068 $4,348 $901 $0 Other Revenues $13,399 $4,293 $1,897 $5,348 $1,001 $860 $0 Transfers in Gas Tax/TDA $123,830 $85,883 $37,947 $0 $0 $0 $0 TOTAL REVENUES $5,388,655 $1,949,572 $594,451 $1,242,162 $1,327,471 $274,999 $0 EXPENDITURES General Government $1,123,885 $432,288 $187,282 $360,770 $84,950 $58,595 $0 Police $1,755,569 $644,869 $284,930 $546,593 $191,247 $87,929 $0 Fire $898,386 $325,075 $122,790 $325,480 $69,551 $55,489 $0 Transportation $1,153,921 $402,671 $177,917 $425,302 $79,613 $68,418 $0 Leisure, Cultural and Social Services $421,292 $292,190 $129,102 $0 $0 $0 $0 Park and Landscape Maintenance $217,836 $151,082 $66,754 $0 $0 $0 $0 Community Development Economic Health $113,104 $0 $0 $83,901 $15,705 $13,497 $0 Development Review $86,376 $30,142 $13,318 $31,836 $5,959 $5,121 $0 Other Community Development $188,710 $65,852 $29,096 $69,553 $13,020 $11,189 $0 Transfers Out $1,459,857 $509,430 $225,088 $538,062 $100,720 $86,557 $0 TOTAL EXPENDITURES $7,418,935 $2,853,599 $1,236,278 $2,381,497 $560,765 $386,796 $0 TOTAL BUDGET NET (DEFICIT)/SURPLUS ($2,030,280) ($904,027) ($641,827) ($1,139,335) $766,706 ($111,797) $0 Source: ADE, Inc. PC1 - 24 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 19 August 2014 Table 7: Detailed Fiscal Impacts for Planned/Approved Projects and Other Vacant Land Total Single Family Multi-Family Office Commercial Industrial Hotel REVENUES Tax Revenues Property Tax $473,181 $266,124 $113,878 $9,083 $42,855 $22,587 $18,653 Property Tax in lieu of VLF $226,025 $139,863 $47,387 $3,780 $17,833 $9,399 $7,762 Sales Tax: General $694,038 $85,782 $53,667 $1,185 $431,898 $10,041 $111,466 Sales Tax: ½ cent Essential Services Measure $300,883 $37,189 $23,266 $514 $187,239 $4,353 $48,323 Sales Tax: Public Safety $15,279 $1,888 $1,181 $26 $9,508 $221 $2,454 Transient Occupancy Tax $404,774 $0 $0 $0 $0 $0 $404,274 Utility Users Tax $178,974 $76,113 $63,146 $4,913 $10,272 $7,924 $16,606 Franchise Fees $84,404 $35,895 $29,780 $2,317 $4,844 $3,737 $7,832 Business Tax Certificates $50,515 $0 $0 $9,491 $19,843 $15,308 $5,873 Real Property Transfer Tax $10,802 $6,075 $2,600 $207 $978 $516 $426 Service Charges Recreation Fees $58,863 $32,172 $26,691 $0 $0 $0 $0 Other Charges for Services $54,847 $23,325 $19,351 $1,506 $3,148 $2,428 $5,089 Other Revenue Fines and Forfeitures $5,213 $2,217 $1,839 $143 $299 $231 $484 Interest Earnings and Rents $8,578 $2,416 $1,336 $109 $2,395 $253 $2,068 Other Revenues $3,033 $1,357 $1,126 $103 $216 $167 $64 Transfers in Gas Tax/TDA $49,679 $27,153 $22,527 $0 $0 $0 $0 TOTAL REVENUES $2,619,087 $737,570 $407,773 $33,376 $731,328 $77,165 $631,372 EXPENDITURES General Government $306,402 $133,388 $110,663 $6,820 $17,686 $11,001 $26,845 Police $508,618 $203,881 $169,146 $10,561 $41,271 $17,034 $66,724 Fire $198,417 $84,382 $70,006 $5,447 $11,388 $8,785 $18,410 Transportation $299,355 $127,308 $105,619 $8,217 $17,181 $13,254 $27,776 Leisure, Cultural and Social Services $189,174 $92,379 $76,640 $0 $0 $0 $20,155 Park and Landscape Maintenance $87,394 $47,766 $39,628 $0 $0 $0 $0 Community Development Economic Health $9,631 $0 $0 $1,621 $3,389 $2,615 $2,006 Development Review $21,090 $9,530 $7,906 $615 $1,286 $992 $761 Other Community Development $46,077 $20,820 $17,273 $1,344 $2,810 $2,168 $1,663 Transfers Out $356,448 $161,061 $133,621 $10,396 $21,736 $16,768 $12,866 TOTAL EXPENDITURES $2,022,605 $880,514 $730,501 $45,020 $116,746 $72,617 $177,207 TOTAL BUDGET NET (DEFICIT)/SURPLUS $596,482 ($142,944) ($322,727) ($11,644) $614,582 $4,548 $454,166 Source: ADE, Inc. PC1 - 25 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Table 8: Detailed Fiscal Impacts for Annexation Areas Total Single Family Multi-Family Office Commercial Industrial Hotel REVENUES Tax Revenues Property Tax $306,945 $202,583 $61,260 $2,544 $27,906 $0 $12,652 Property Tax in lieu of VLF $501,454 $162,213 $49,052 $100,242 $122,393 $44,854 $22,699 Sales Tax: General $2,254,169 $103,362 $47,118 $35,183 $1,750,572 $51,830 $266,104 Sales Tax: ½ cent Essential Services Measure $977,241 $44,810 $20,427 $15,253 $758,918 $22,470 $115,363 Sales Tax: Public Safety $49,623 $2,275 $1,037 $775 $38,537 $1,141 $5,858 Transient Occupancy Tax $966,326 $0 $0 $0 $0 $0 $965,133 Utility Users Tax $445,382 $91,712 $55,440 $145,911 $71,770 $40,905 $39,645 Franchise Fees $210,043 $43,251 $26,146 $68,812 $33,847 $19,291 $18,696 Business Tax Certificates $513,568 $0 $0 $281,878 $138,649 $79,021 $14,021 Real Property Transfer Tax $7,007 $4,625 $1,398 $58 $637 $0 $289 Service Charges Recreation Fees $62,199 $38,765 $23,434 $0 $0 $0 $0 Other Charges for Services $136,488 $28,105 $16,990 $44,715 $21,994 $12,535 $12,149 Other Revenue Fines and Forfeitures $12,972 $2,671 $1,615 $4,250 $2,090 $1,191 $1,155 Interest Earnings and Rents $21,373 $2,493 $1,067 $2,309 $9,756 $901 $4,843 Other Revenues $8,215 $1,635 $989 $3,069 $1,510 $860 $153 Transfers in Gas Tax/TDA $52,495 $32,717 $19,778 $0 $0 $0 $0 TOTAL REVENUES $6,525,501 $761,219 $325,751 $704,997 $2,978,579 $274,999 $1,478,759 EXPENDITURES General Government $712,939 $160,724 $97,159 $205,867 $126,506 $58,595 $64,087 Police $1,243,418 $245,664 $148,506 $313,655 $288,372 $87,929 $159,292 Fire $538,874 $101,675 $61,463 $180,300 $95,995 $55,489 $43,951 Transportation $744,954 $153,398 $92,731 $244,054 $120,044 $68,418 $66,310 Leisure, Cultural and Social Services $226,715 $111,311 $67,288 $0 $0 $0 $48,117 Park and Landscape Maintenance $92,347 $57,555 $34,792 $0 $0 $0 $0 Community Development Economic Health $90,113 $0 $0 $48,145 $23,682 $13,497 $4,789 Development Review $52,617 $11,483 $6,941 $18,268 $8,986 $5,121 $1,817 Other Community Development $114,954 $25,086 $15,165 $39,912 $19,632 $11,189 $3,970 Transfers Out $889,287 $194,069 $117,316 $308,759 $151,871 $86,557 $30,715 TOTAL EXPENDITURES $4,706,220 $1,060,965 $641,362 $1,358,960 $835,087 $386,796 $423,050 TOTAL BUDGET NET (DEFICIT)/SURPLUS $1,819,280 ($299,746) ($315,611) ($653,963) $2,143,492 ($111,797) $1,055,709 Source: ADE, Inc. PC1 - 26 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 21 August 2014 Public Facilities Financing The LUCE includes a number of circulation improvements and would require expansion of other City facilities to accommodate planned growth. This section addresses options to finance the construction of these facilities, which include road, bikeways and highway improvements, a new fire station, expanded police facilities, new parks and water and sewer facility expansions. Facilities Costs Transportation. The City has a Transportation Impact Fee (TIF) program, which was updated most recently in 2006. The existing TIF includes $51.5 million ($2006) in improvements plus $24.6 million in financing costs for a total of $76.1 million. Major projects in the existing citywide TIF include the Prado Rd./Hwy 101 interchange, the Orcutt Rd./UPRR Grade separation and the Hwy 101/LOVR interchange improvements among others. In addition, the major specific plan areas included in the LUCE have project specific transportation improvement obligations that are funded through separate impact fees or developer exactions. Margarita Area Specific Plan (in addition to a share of the Prado Rd. Interchange) Prado Road Extension - $18,967,700 Prado & Higuera Intersection - $1,600,000 Orcutt Area Specific Plan (OASP Share): Total equals $4.2 million, selected projects include: Orcutt Road/Tank Farm Road - $927,978 Broad Street/South St-Santa Barbara Road - $381,000 Broad Street/Tank Farm Road - $222,404 Orcutt Rd/Johnson Avenue - $300,004 Orcutt Road Widening - $310,685 Bridges - $1,610,000 Airport Area Specific Plan (AASP Share): Total equals $19.3 million, selected projects include: Tank Farm Rd./Higuera Intersection Improvements - $1,310,000 Tank Farm Rd. Widening - $5,641,557 Prado Rd./Higuera Intersection Improvements - $1,640,000 Table 8 lists the some of the major circulation improvements included in the LUCE, with planning level cost estimates and notes regarding additional analysis needed in some case to further define the projects. In addition to these projects, the Bicycle Transportation Plan adopted in 2013 includes an estimated $48 million in facilities costs. The Prado Rd. interchange is partially included in the TIF ($6,587,000), with a total cost in 2006 dollars of $22 million plus $9.3 million in bond financing costs. Part of the Prado Interchange is also contained in the MASP PC1 - 27 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 22 Administrative Draft Fiscal Analysis August 2014 financing program. A full project funding plan for the remainder of costs for the interchange will be needed as major projects move forward – such as the San Luis Ranch project. The current cost estimate is a minimum of $29 million or more, due to higher construction and right of way (ROW) acquisition costs. This project has been tied in part to the development of the Dalidio project and also benefits the Margarita Area Specific Plan, both of which have been assigned specific funding responsibility for the Prado Rd. Interchange. The Citywide TIF includes 29.9 percent of the cost of this project, plus financing costs. Table 8: LUCE Circulation Projects Projects Cost ($mil) Notes Prado Road Interchange $29.0 Included partially in existing TIF, needs full funding plan. Orcutt Overpass $26.0 Partially included in TIF/PUC funding potential Tank Farm to Buckley Connector $6.7 Will be built by development as they occur. Victoria Connection $2.5 Would require new localized fee Broad St. Consolidated Access $1.7 Would require new localized fee Marsh/Higuera 2-way $3.5 Not in TIF. Potential General Fund Project HWY 1/Hwy 101 (Santa Rosa) & Broad St. Ramp Closures $43.0 Not in TIF. Statewide/Regional Project Boysen & Santa Rosa $4.0 Not in TIF, Statewide/Regional Project DT Transit Center NA Mission Plaza Expansion $3.5 Grants/General Fund (Not transportation) Projects to Include in New/Expanded Citywide TIF Bishop Extension $29.0 Requires further study/ Previously excluded from TIF LOVR By-pass $15.0 Explore options with property redevelopment Bianchi/Pismo/Higuera Realignment $2.7 Explore options with property redevelopment Madonna/Higuera Realignment $7.5 Explore options with property redevelopment Chorro & Broad Realignment $8.8 Explore options with property redevelopment Subtotal $63.0 GRAND TOTAL $192.2 Source: Kittleson & Associates, using the planning level costing procedure developed and approved by Caltrans as part of the SLOCOG US 101 Mobility Master Plan. Not for Programming Purposes. The Orcutt Overpass and the Bishop Extension were also included in the 2006 TIF analysis. It is anticipated that 80 percent of the Orcutt Overpass would be funded from grants and 65 percent of the Bishop St. Extension would be funded by other sources. It is estimated that LUCE development would generate $97.6 million under the existing TIF fee structure (see Appendix Table B-1). However, the lower portion of Table 8 indicates that as much as $63 million in additional projects may need to be included in the TIF, or other financing sources found, in order to fully implement the LUCE Circulation Plan. The City has yet to determine how best to fund all projects necessary to serve new development and will be conducting a fee study once the LUCE project is complete to determine how best to fund needed infrastructure projects. The City has already begun considering how to complete this impact fee update and a number of recommendations have been developed, which are presented below at the conclusion of this section of the Fiscal Report, that are based on these early discussions. It is critical once the LUCE is approved, PC1 - 28 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 23 August 2014 the City that the City move forward with the updated financing program in order to implement the needed transportation improvements. Police. The current police station is at capacity and the City has identified $42.5 million in the CIP as the potential cost to build a new police station. The LUCE development would add the need for 14 sworn officers to the existing complement of 59 sworn officers. If the City builds a single new expanded police station to serve the entire City, rather than a police substation to serve the expansion areas, the LUCE development would generate a service burden equal to about 19 percent of this facility, or $8.1 million. Fire. The City has budgeted $3.5 million for the new Station 5 plus a pumper truck, not including land cost for the Station. Based on the analysis of operating cost impacts in the previous section of the fiscal analysis, the LUCE development would represent 62 percent of the service area for the new station. Pending a formal nexus study for this facility, we estimate the LUCE share of the fire station cost at $2.2 million, plus a similar share of the eventual land cost for the facility. Water and Wastewater. The City updated its water and wastewater master plans in 2013 and adopted new impact fees to fund water supply and system capacity expansions. The cost allocations between future and existing development are shown in Table 9. LUCE development would be expected to fund the Future Development components of these costs through payment of development impact fees. It should be noted that Cal Poly has an MOU with the City for capacity in both the water and wastewater systems and has made payments to the City to maintain its capacity allocations. Table 9: Water and Wastewater Facilities Costs ($millions) Projects Cost Responsibility Existing Development Future Development Total Water Supply $98.2 $63.2 $161.4 Water Facilities $45.2 $11.4 $56.7 Total Water $143.4 $74.6 $218.1 Water Reclamation Facility $100.4 $25.8 $126.2 Catchment Areas Margarita $0.5 $0.5 $1.0 Calle Joaquin $1.1 $0.4 $1.5 Silver City $0.7 $0.3 $1.0 Laguna $2.4 $0.7 $3.1 Tank Farm $8.0 $11.1 $19.1 Subtotal $12.8 $12.9 $25.7 Total Wastewater $113.2 $38.7 $151.9 Source: City of San Luis Obispo Utilities Department, 2013 Water and Wastewater Development Impact Fees. Parks. The City has a park standard of 10 acres per 1,000 population, which would equate to 113.4 acres for the LUCE development. Several of the projects in the LUCE are planned to provide park land within the development. The Caltrans site and the MASP would provide more park land that is warranted by their own population, while the Dalidio and LOVR Creekside projects would meet only part of their own park needs. The PC1 - 29 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 24 Administrative Draft Fiscal Analysis August 2014 Orcutt area (OASP) would meet its own parkland requirements through a combination of active and passive park space plus anticipated joint use of a new elementary school planned for the area.4 In order to meet the standard for park space, the City would need to obtain another 49.2 acres. If this land were to be purchased at a cost of $300,000 per acre, the total cost would be $14.8 million. Development cost are estimated at about $235,000 per acre, based on similar costs for the MASP.5 This cost would potentially apply to 91 acres of new parkland outside the OASP, for a total development cost of $21.4 million. Thus, the combined cost of acquisition and development of parks for the LUCE would be $36.2 million. Financing Sources The City relies on a variety of funding sources for capital improvements, including development impact fees, utility and other enterprise user charges, state and federal grants, regional transportation funds, debt financing and general fund revenues. In general, though, the City expects new development to pay for facilities it needs through development impact fees or direct developer exactions. Development Impact Fees. ADE estimates that the LUCE development would pay about $279 million in existing development impact fees to the City of San Luis Obispo (Table 10 and Appendix B). For water, wastewater, affordable housing and public art, these fees appear to cover the identified impacts.6 For affordable housing and public art, it is assumed the level of impact is defined by the fees paid. There are a number of ways for developers to comply with the inclusionary housing ordinance without necessarily paying a fee. The analysis in Table 10 assumes no residential developers will pay a fee while all non-residential developers will pay the fee. In reality, this may be different for both types of developers, particularly for smaller residential subdivisions or for mixed use projects. For transportation and parks, the fees do not cover the full cost of LUCE improvements. In addition, additional facilities costs have been identified for police and fire facilities for which the City does not have development impact fees. Table 10: Estimated Existing Development Impact Fees to be Paid by LUCE Development and Corresponding Facilities Costs ($millions) Land Use Trans- portation Water Waste- water Parks/ Open Space Affordable Housing [a] Public Art Total Single Family $22.8 $26.1 $14.7 $11.2 $74.8 Multi-Family $14.1 $18.7 $10.7 $7.1 $50.7 Office $37.7 $7.6 $4.6 $0.2 $17.9 $1.7 $69.9 Retail $20.0 $8.3 $4.5 $0.3 $20.7 $2.2 $56.4 Industrial $2.6 $3.5 $2.2 $0.4 $3.8 $0.4 $13.0 Hotels $2.1 $5.2 $2.2 $4.0 $0.4 $14.0 TOTAL $99.3 $69.5 $39.0 $19.3 $46.4 $4.8 $279.0 Facilities Costs $139.1 $74.6 $38.7 $36.6 $46.4 $4.8 $340.2 Source: ADE and City staff, based on City fee schedules. See Appendix B for additional detail. Transportation Facilities costs include only existing TIF projects plus $63 million in LUCE project that may be included in a future TIF update. 4 Walter Kieser, Economic and Planning Systems, Memorandum to Michael Codron and Lee Johnson regarding Review of City’s Current Development Impact Fee Programs, January 6, 2014, pp. 27-28. 5 Kieser, ibid. 6 For the water facilities costs, the minor discrepancies from the projected fee revenues are likely due to incidental variations in fee revenue estimates. PC1 - 30 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 25 August 2014 The City has recently reviewed its development impact fee program and considered other infrastructure financing mechanisms that might be available. Considerations with impact fees include not only their ability to fund needed infrastructure but also their effect on the feasibility of development in the City. This latter concern, expressed in the City’s Economic Development Strategic Plan, has prompted closer consideration of the City’s impact fee program and its potential effects on commercial and job generating land uses. One set of guidelines suggests that impact fees should not exceed 15 percent of the value of residential development or 10 percent of the value of non-residential development.7 Table 11 provides a measure of the City’s impact fees as calculated in aggregate for the LUCE land use categories. The first column shows the impact fees calculated in Table 10, followed by the estimated market value from the fiscal analysis. The estimated fees range from 5.0 percent of value for single family development to 15.3 percent for office development. It is clear that the fees for non-residential development exceed the optimal thresholds shown in the next column. However, the EPS analysis indicates that this feasibility issue is not a citywide concern but rather is focused in the special fee areas, primarily for the TIF, such as the MASP, the LOVR area and the triple fee zone. In addition, for non-residential development 5 percent of value is included for the inclusionary housing program. Retail projects in mixed use developments that meet the affordable housing requirements directly rather than through the fee, would see their total fee burden fall below the 10 percent threshold. Moreover, the thresholds themselves are guidelines and actual feasibility levels for specific projects may be different. The Public Facilities Financing Plan for the Airport Area Specific Plan shows comprehensive cost burdens ranging from 10.1 percent for business park uses to 11.2 percent for service commercial and 16.1 percent for manufacturing. The plan also notes that these burdens could be reduced through the use of Community Facilities District Financing. Table 11: LUCE Impact Fee Funding Capacity Land Use Calculated Impact Fees ($mil.) [b] Market Value ($mil.) [a] Impact Fees as Percent of Value Optimal Impact Fee Burden Ratios Impact Fee Thresholds Based on Optimal Burden Ratios ($mil.) Potential Additional Gross Fee Capacity Single Family $74.8 $1,484.4 5.0% 15.0% $222.7 $147.8 Multi-Family $50.7 $754.1 6.7% 15.0% $113.1 $62.4 Office $70.3 $460.6 15.3% 10.0% $46.1 ($24.3) Retail $56.2 $457.7 12.3% 10.0% $45.8 ($10.4) Industrial $13.0 $120.5 10.8% 10.0% $12.0 ($1.0) Hotels $14.0 $98.5 14.2% 10.0% $9.8 ($4.1) TOTAL $279.1 $3,375.8 8.3% 13.3% $449.5 $170.4 Source: ADE. Totals may not add due to rounding. [a] ADE projections of initial assessed value. [b] From Table 10. Does not include school fees. However, in general, Table 11 indicates that residential uses could probably absorb higher impact fees but non-residential uses have a lower capacity for additional fee burdens. Through a nexus analysis for the additional LUCE circulation improvements, the City could determine how much of the estimated $40 million shortfall in the TIF could be ascribed to new residential development. In addition, other impact fees could be 7 Walter Kieser, Economic and Planning Systems, Infrastructure Financing Analysis Session #3, presentation to the San Luis Obispo City Council, March 18, 2014. Slides 9-11. PC1 - 31 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 26 Administrative Draft Fiscal Analysis August 2014 developed to help fund the police and fire facilities as well as the park development costs identified above. The estimated shortfall in fees for all LUCE facilities is about $71.5 million, not including bikeway facilities that may be funded with impact fees. In its March 2014 workshop on Infrastructure Financing related to the Economic Development Strategic Plan, the City reviewed a number of findings from the analysis of the existing development impact fee program. 1. Incremental evolution in the City’s existing development impact fee programs have resulted in a complex system of base fees, sub area fees, and geographic fee variation that warrants re- consideration in the next fee update process. 2. There are geographic “overlaps” in the City’s fees that cause significant difference in fee levels in various parts of the City. 3. At the Citywide level, aggregate fee levels are consistent with fees levied by other cities, though some specific fees appear to be high by industry standards. 4. There is an inconsistency between land use categories used to compute fees between fee programs. 5. Fees do not contain a cost component for administration and updating. 6. The fees are currently escalated using the Consumer Price Index (CPI), but the Engineering New Record (ENR) may be a more appropriate index to track changes in construction costs. 7. The City does not charge fee for all municipal infrastructure categories, though this may be appropriately considered in the context of other concerns about the overall fee program. 8. The various fee programs should be integrated into the City’s overall capital Improvement Plan (CIP) Addressing these concerns would help the City close the gap in funding for LUCE related facilities costs. Other Funding Sources and Financing Mechanisms Under the current development impact fee program, new development would not pay for all of the infrastructure and facilities needed to support implementation of the LUCE. Part of the issue is that City does not have development impact for all the types of facilities that are needed, but part of the issue is that some of the facilities are needed to correct existing service deficiencies, such as the fire station in the south part of town. Similarly, the City may not be able to simply expand the police station to accommodate future growth, but would need to build a new facility, which could only partially be funded by an impact fee if it were adopted. The City may be able to secure other funding sources for certain costs and would have the option of establishing other kinds of financing mechanisms besides impact fees to facilitate private development paying a greater share of the costs. For example, some of the transportation costs may be funded with regional transportation funds or state and federal grants. Several of the LUCE improvements are under consideration in the US 101 Mobility Study underway by SLOCOG and may eventually qualify for some regional funding. A number of the facilities may qualify for other state or federal grant funding. The City can also using bond financing to acquire the capital needed to build facilities, which can then be paid off over a longer period of time. The City has used this approach for utility infrastructure projects and anticipates that some of the major transportation projects will need bond financing in order to be completed. This approach makes funding large projects more manageable by reducing initial cash requirements, but it PC1 - 32 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 27 August 2014 does increase the overall cost of the project by adding financing costs to the actual construction cost of the facilities. In addition, the City must have a revenue source, such as utility service charges, to service the debt or use General Fund revenues for this purpose. The City may also consider land based financing to facilitate developers and land owners paying a greater share of the cost of new facilities. There are a number of types of land based financing mechanisms including Community Facilities Districts and other forms of assessment districts. Such financing mechanisms also provide the opportunity to use bond financing, which not only allows the needed facilities to be built in a timely manner but also can reduce cash requirements for new development and improve the feasibility of desired economic development projects. Land based financing programs can be used within defined development areas, such as specific plans, with landowner/developer approval, or they can be set up on a citywide basis with voter approval. However, they are best used as part of a comprehensive capital improvements program strategy that includes a variety of funding source options. PC1 - 33 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 28 Administrative Draft Fiscal Analysis August 2014 Appendix A: Methodology for the Fiscal Analysis The analysis addresses the impact of each type of land use on the City General Fund, both in terms of annual revenues generated and the demand for increased public services. The present report uses the current Fiscal Year 2013-2014 City budget as a basis for the cost of revenue analysis, which is updated from the Background Report Chapter 2.2. General Fund Budget The City’s General Fund Budget for Fiscal Year (FY) 2013-2014 includes $60.8 million in revenue and about $65.5 million in current expenditures (Table A-1). The budget anticipates additional expense reductions of about $914,000 based on actual payouts of salaries and benefits. The additional net costs of $3.6 million are covered through prior year encumbrances and reimbursements from other funds. The general sales tax is the single largest revenue source, at $15.4 million. The City voters have also approved an additional sales tax measure called Measure Y, which supplements the general sales tax with another 50% of local sales tax revenues. Measure Y was approved in 2006 but will need to be re-approved by the voters by 2014. State Proposition 174 created the Public Safety sales tax, which is allocated to local jurisdictions by the state and is projected to yield $338,900 for San Luis Obispo in the current year. The general property tax is the second largest revenue source, at about $8.8 million per year. The City’s total assessed value is $6.3 billion and the base property tax rate of one percent produces a total tax from properties within the City of $63.3 million. However, the City receives only about 14 percent of this total and the remainder is distributed to local school districts and other taxing agencies. The City also receives another form of property tax from the state to replace vehicle license fees formerly allocated to the City, which adds $3.6 million to the City General Fund. The transient occupancy tax (TOT) is charged at the rate of ten percent on room revenues for all lodging in the City. This is a relatively large revenue, at $5.9 million, and reflects San Luis Obispo’s strong position as a visitor attraction in the region. The utility users tax and the franchise fees are the next two largest General Fund revenues, at $5.3 and $2.5 million, respectively. Both revenues are generated by residential and business use of the various private utilities operating in the City, including electric and gas service, telephone, and cable TV. The City also charges businesses for annual business licenses and a gross receipts tax, which together generate about $2.1 million per year. Most of the other revenues in the General Fund are direct charges for services, the largest of which is development related fees such as building permits, planning entitlement fees or plan check fees ($3.6 million total, of which $300,000 is carried over from the prior year). Also, fees for recreation programs generate $1.6 million per year, which defrays about 40 percent of the cost for recreation programs. Several revenue sources are transferred into the General Fund from other Budget Funds. The Gas Tax revenues are allocated to the City by the state based on a formula that includes miles of roadway in the City as well as the City’s population. These funds can only be used for street maintenance. The other revenue source in this category includes Transportation Development Act (TDA) funds, which may be used only for alternative transportation modes and not for street maintenance under City policy. PC1 - 34 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 29 August 2014 Table A-1: San Luis Obispo General Fund Budget, 2013-2014 Budget Category Annual Budget REVENUES Taxes Property Tax $8,761,100 Property Tax in lieu of VLF $3,645,700 Sales Tax: General $15,394,700 Sales Tax: Measure Y $6,674,000 Sales Tax: Public Safety $338,900 Transient Occupancy Tax $5,990,300 Utility Users Tax $5,356,000 Franchise Fees $2,525,900 Business Tax Certificates $2,116,600 Real Property Transfer Tax $200,000 Subventions and Grants $1,200,600 Service Charges Development Review Fees $3,571,600 Recreation Fees $1,577,400 Other Charges for Services $1,641,300 Other Revenue Fines and Forfeitures $156,000 Interest Earnings and Rents $179,000 Other Revenues $95,500 Transfers In Gas Tax/TDA $1,331,300 Transfers, Other $49,000 TOTAL REVENUES $60,804,950 EXPENDITURES General Government $10,314,900 Police $14,977,313 Fire $9,884,758 Transportation $3,363,700 Leisure, Cultural and Social Services $5,085,830 Parks and Landscape Maintenance $2,341,970 Budget Category Annual Budget Community Development $7,988,300 Economic Health $691,944 Development Review $1,471,666 Construction Regulation $3,443,119 Other Community Development $2,381,571 Transfers Out $11,333,700 TOTAL EXPENDITURES 65,467,941 Other Expenditure Savings (914,700) TOTAL NET REVENUES OVER EXPENDITURES ($3,570,821) Source: City of San Luis Obispo 2013-2015 Financial Plan and 2013-14 Mid-Year Budget Review. February 2014. PC1 - 35 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 30 Administrative Draft Fiscal Analysis August 2014 On the expenditure side, police services has the largest budget at $15.0 million. The public safety function which includes the Fire Department is the largest function provided by the City General Fund with a budget of $25.0 million. The general government function shown in Table 2.3-2 represents a number of City programs combined, including8:  City Council  General Administration  City Attorney  Human Resources  Finance and Information Technology  Public Works Administration  Building and Fleet Maintenance The Transportation function includes planning, engineering, & street and storm drain maintenance. As discussed in the fiscal analysis, costs for these services will increase not only indirectly due to population and non-residential development, but also directly due to additional transportation management programs and new road facilities in the LUCE. Other transportation related services such as parking and transit are discussed in the analysis under Enterprise Funds. Parks and recreation, cultural services and social services are all grouped under the Leisure, Cultural and Social Services Function, with a total budget of $7.4 million, of which $2.3 million is for park and landscape maintenance. The Community Development Function includes planning and development review, as well as economic development activities that are located in the City’s Administration Department. In addition, the Building and Safety Division provides code enforcement and neighborhood services. The expenditures figures under the heading Transfers Out in Table 2.3-2 also include contributions by the General Fund to the Capital Improvement Program (CIP) and to the Debt Service Fund. For the current fiscal year, the General Fund is projected to make $7.1 million in CIP expenditures, most of which is funded by Measure Y sales tax revenues. In addition, the General Fund will contribute $2.76 million to debt service for bonds to pay for a variety of public safety, transportation, leisure services and general City building capital projects as well as $935,000 to pay down the City’s PERS liability. Fiscal Impact Calculations This section discusses in more detail how the major revenues and costs have been calculated for the future growth included in LUCE. Property Tax The base property tax is one percent of the assessed value for real property. In order to estimate assessed values for projected development in the LUCE, ADE compiled data on recent property transactions in San Luis 8 The General Fund expenditures shown in Table 2.3-1 are organized by functional category, as presented in the City budget. This is different than the City’s departmental organization, but provides a clearer picture of the service activities provided by City government. PC1 - 36 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 31 August 2014 Obispo. Typically, the initial assessed value for new homes is set at the market value, or the sales price of the home when it is first sold. Table 13 shows data for 500 residential transactions and 31 non-residential transactions since January 2013. Since there has been very little new construction through the recession, most of these transactions are for existing properties. The non-residential transactions in particular are not comprehensive enough to represent all of the types of future development included in the LUCE, so we have supplemented the property sale data with other typical market factors to fill out estimates of average property values to use in the fiscal analysis (Table A-3). Most of these values are close to the averages for the properties shown in Table A-2, except for office and hotel uses, which we believe will be higher for new construction than is reflected in the recent property sales data. Table A-2: Recent Property Transactions in San Luis Obispo Source: ADE based on Dataquick, Zillow and Loopnet. Source: ADE based on Dataquick, Zillow and Loopnet. Property Type Aggregate Sales Amounts Number of Units/ Square Footage Sales/Units/SF No. of Transactions RESIDENTIAL Single Family Residence $192,601,700 314 $613,381 314 Condominium, PUD $39,909,484 110 $362,813 110 Duplex $2,210,500 8 $276,313 4 Triplex $1,420,000 6 $236,667 2 Quadruplex $2,749,000 16 $171,813 4 Mobile Home Parks, Trailer Parks $3,945,000 24 $164,375 24 Multi-Family Dwelling (2-4 Unit) $18,654,000 53 $351,962 32 Multi-Family Res (5+ Units) $2,787,500 30 $92,917 4 Residential Miscellaneous $4,460,500 6 $743,417 6 NON-RESIDENTIAL Food Store, Market $650,000 4,053 $160 2 Hotel/Motel $1,982,000 15,639 $127 1 Medical/Dental/Professional Bldg $1,445,000 7,045 $205 3 Office Building $6,578,500 33,015 $199 11 Store/Office Combo $4,525,000 22,132 $204 5 Stores, Retail Outlet $4,636,000 13,863 $334 4 Warehouse, Storage $3,868,500 35,272 $110 4 Industrial $2,495,000 12,585 $198 1 Table A-3: Assessed Value Factors Used in the Fiscal Analysis Value per Unit RESIDENTIAL Single Family $613,400 Multi-Family $303,600 NON-RESIDENTIAL Office $205 Retail $265 Industrial $135 Hotel $205 PC1 - 37 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 32 Administrative Draft Fiscal Analysis August 2014 Property Tax Allocation As mentioned, the property tax paid by property owners is distributed to a wide range of local taxing agencies including not only the City of San Luis Obispo, but also the County, the school districts and other special taxing districts. On average, the City gets about 14 percent of the one percent tax for parcels within the historic City boundaries. The County of San Luis Obispo receives an average of about 22 percent of the tax and school district and other educational agencies, receive the majority of property tax revenues. In 1996, San Luis Obispo and the other cities in the County executed a property tax sharing agreement with the County for properties that would annex into the cities after that time. For those properties, the cities get a lower share of property tax from residential development, calculated as one-third of the share that would otherwise go to the County General Fund. That share is about 22 percent, so the cities’ share of residential property tax in annexation areas is about 7.4 percent, rather than the 14 percent that San Luis Obispo otherwise gets. In addition, the County continues to get the existing property tax generated by the properties in their undeveloped state at the time of annexation. For properties that develop into non-residential uses, such as retail, office or industrial business, the cities do not get any property tax. The City does collect any sales taxes or other revenues generated by these properties, which help pay for City services that are required to support these developments. The property tax estimates shown in the fiscal analysis reflect these tax allocation factors, depending on whether the property is within the historic City boundaries or would have been annexed after 1996. The analysis also deducts the existing assessed value of each property, where available, to limit the analysis to future new revenues that would be generated by the LUCE development. Sales Tax Calculations As part of the description of local economic conditions for the LUCE, ADE conducted a retail market analysis, which is included in Chapter 2.3 of the LUCE Background Report. In general, commercial businesses in San Luis Obispo capture more retail sales than is generated by the residents of the City alone. San Luis Obispo is a regional retail hub that attracts shoppers from around the County. In addition, commuters who drive into the City to work and tourists also make taxable retail purchases. Finally, business-to-business transactions generate a certain amount of sales taxes when the items purchased are not for resale to customers. Based on the retail market analysis and reviewing sales tax records for non-residential types of businesses, ADE estimated the sales tax generation factors by land use shown in Table A-4. The City receives one percent of taxable sales in the form of general sales taxes. The $92.00 in sales taxes per single family resident represents taxable purchases of $9,200 per year, which does not include groceries, pharmaceuticals or other non-taxable items. The dollar amounts shown for non-residential uses are presented in terms of revenues generated per job for each land use type. These are not employee expenditures but are taxable business transactions. They are expressed per job rather than per square foot of building space simply because our data on existing jobs is more reliable than the building space data and provide a more accurate factor to calculate potential future revenues from new development. The factor for commercial uses reflects sales in retail businesses and is roughly equivalent to taxable sales of $314 per square foot of retail space. Retail businesses serve as the point of sale for purchases from residents, visitors and other businesses, so most of the sales tax collected by the City comes through accounts of retail businesses. That means for the residential uses in particular we would be double counting revenues if we use raw sales tax generation factors simultaneously for both residential and retail uses. Therefore, this factor for commercial businesses has been lowered to net out sales from the other land uses. PC1 - 38 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 33 August 2014 Table A-4: Per Capita Sales Tax Factors Land Use General Sales Per Resident or Per Job Single Family $92.00 Multi-Family $70.00 Office $10.00 Commercial $1,725.00 Industrial $52.00 Hotel Visitors $1.50 Source: ADE with data from MuniServices. The City’s existing 2,120 hotel rooms attract some 1,100,000 visitors to San Luis Obispo. Each visitor spends an estimated $150 on taxable restaurant and retail purchases, which generates $1.50 in sales taxes. The LUCE includes plans for 803 additional hotel rooms (See Table 1), which would attract an average of nearly 416,700 new visitors to the City and generate about $628,800 in additional general sales taxes per year. Transient Occupancy Tax (TOT) The hotel rooms would also generate new TOT taxes. For this analysis, we have assumed an average room rate of $120.00 per night and a 65 percent occupancy rate. These factors are comparable to recent experience in San Luis Obispo. If economic conditions improve substantially, the City could expect to see even higher revenues in the future. Per Capita Revenues and Costs Most other City revenues and costs are calculated on a per capita formula method based on employment and population in each land use category. Generally, jobs in the City are assumed to exert one-half the service demand as residential population. This is a standard assumption in fiscal impact analysis and reflects the fact that employees working in the City occupy their positions 8 hours per day while residents are there a minimum of 16 hours per day and more if they are not employed. In San Luis Obispo, there are 45,473 residents and 32,560 jobs. We also estimate there are the equivalent of 3,014 daily hotel visitors (1,100,000 total visitors/365 days), which are counted in this analysis the same as the residential population. With the jobs counting 50% of the population impact, it works out that the residential population requires 70 percent of the services that are allocated under this formula, while non-residential uses require 25 percent and hotel uses 5 percent. A similar logic is used to estimate revenues such as the utility users tax, franchise fees and miscellaneous service charges, fines and forfeitures collected by the City (Table A-5). Other revenues are more clearly associated with one type of land use or another, such as the business license taxes which are paid only by non-residential land uses and recreation program fees which tend to be mostly paid by local residents. Also, the gas tax revenues, which are shown as a transfer into the General Fund from the Gas Tax fund, are allocated to residential uses since the state formula for allocating these revenues to cities is based mainly on a per capita formula. PC1 - 39 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 34 Administrative Draft Fiscal Analysis August 2014 Table A-5: Per Capita Revenue and Cost Factors Residential Business Visitors Proportion Per Capita Proportion Per Employee Proportion Per Visitor REVENUES Utility Users Tax 70% $82.07 25% $ 41.03 5% $82.07 Franchise Fees 70% $38.70 25% $19.35 5% $38.70 Business Tax Certificates 0% $0.00 100% $79.27 Service Charges Recreation Fees 100% $34.69 0% $0.00 Other Charges for Services 70% $25.15 25% $12.57 5% $25.15 Other Revenues Fines and Forfeitures 70% $2.39 25% $1.20 5% $2.39 Other Revenues 70% $1.46 30% $0.86 Transfers in Gas Tax/TDA 100% $29.28 0% $0.00 EXPENDITURES Police 70% $219.83 25% $109.91 5% $219.83 Fire 70% $90.98 25% $45.49 5% $90.98 Transportation 70% $59.04 25% $29.52 5% $59.04 Leisure, Cultural and Social Services 94% $99.60 0% $0.00 6% $99.60 Park and Landscape Maintenance 100% $51.50 0% $0.00 0% $51.50 Community Development Economic Health 0% $0.00 85% $13.54 15% $0.00 Development Review 70% $10.28 25% $5.14 $10.28 Other Community Dev. 70% $22.45 25% $11.22 5% $22.45 Transfers Out 70% $173.66 25% $86.83 5% $173.66 Service Cost Analysis The fiscal impact analysis is intended to show the increased public service costs for the City as new development occurs. This portion of the analysis focuses on annual recurring costs and revenues and therefore excludes capital improvement projects needed to support the LUCE. The Public Facilities Financing section addresses the infrastructure and facilities costs and funding programs needed to support future growth. Other costs that are unlikely to be repeated or expanded due to future growth have also been excluded. Mainly, these are costs for management functions such as the City Council and City Department Heads. While future growth will increase the demand for services, these service expansions will most likely occur through increases in service delivery staff. Table A-6 lists the costs removed from the fiscal impact analysis. In addition, the fiscal analysis deducts development and construction related fees that are paid once during the entitlement or construction process, but not paid on an annual basis by the eventual property owners. An PC1 - 40 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 35 August 2014 amount equal to these revenues, shown as $3,291,600 in Table A-6, is deducted from the costs for the Community Development Department. These adjustments have the effect of focusing the fiscal analysis on the ongoing revenues and costs associated with new development rather than the onetime cost of processing the development applications. Subventions an grant have been removed from the analysis since they cannot be projected into the future associated with new development. As noted earlier in the analysis, increased costs for IT, building maintenance and street maintenance have been added to the cost basis for the fiscal analysis. Table A-6: Fiscal Model Revenue and Expenditure Adjustments [a] Function Amount Item General Government ($138,900) City Council General Government ($139,061) IT/Finance Dir General Government ($96,538) City Clerk General Government ($221,520) City Manager General Government ($125,554) Human Res Dir General Government $160,000 Additional IT capital expenditures General Government $867,000 Additional building maintenance expenditures Public Safety ($144,352) Police Chief Public Safety ($139,061) Fire Chief Public Safety ($280,000) Fire Plan Check Fees Transportation ($123,578) Public Works Dir Transportation $3,625,000 Additional street maintenance expenditures Leisure ($111,592) Parks & Rec Dir Community Development ($96,538) ED Mgr Community Development ($139,061) CD Director Community Development ($85,826) Chief Building Official Community Development ($3,291,600) Development Review Fees Various ($914,700) Mid-Year Expenditure Savings Various ($1,200,600) Subventions and Grants Benefits 49% Added to salaries [a] Note: Salary figures generally reflect the average of the salary scale for each position as published by the San Luis Obispo Human Resources Departments. The figures do not necessarily represent the actual salaries of the individuals who occupy these positions. The additional benefits factor of 49% of base compensation is derived from the City of San Luis Obispo 2013-2015 Financial Plan, page D-19. Municipal service costs for services provided directly to the population or businesses were generally allocated based on the per capita method explained above. First, however, certain services were allocated to residential or non-residential land uses based on their function. Recreation, cultural services and social services were allocated 100% to residential land uses. Economic Health was allocated 100% to non- residential land uses. Police services costs are estimated using the per capita methodology as shown in Table A-5. However, within the non-residential land uses, commercial and hospitality land uses were weighted roughly twice as much as PC1 - 41 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 36 Administrative Draft Fiscal Analysis August 2014 other business types, based on data from other cities that indicate calls for service related to shoplifting, burglary, parking lot incidences and disturbing the peace are higher for retail, restaurant and night club uses. For Fire Department services, one-third of the costs are allocated based on assessed value for each land use, which represents the portion of fire department services related to fire suppression. The other two-thirds represents medical emergency responses, which are allocated based on the per capita formula explained above. This overall split of services is based on a general discussion with the City Fire Marshall. The Transfers Out are mainly for capital improvement projects and debt service, which is for long term capital projects financing. In particular, nearly $5 million of the total sales tax revenue received by the City from Measure Y is programmed for capital improvements projects. If Measure Y is not renewed by the voters, these expenditures and General Fund contributions will likely need to be reduced. Other recipients of General Fund support are the Community Development Block Grant program, the Open Space Protection Fund, the Fleet Replacement Fund, Information Technology Fund and the Major Facility Replacement Fund. PC1 - 42 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 37 August 2014 Appendix B: Development Impact Fee Estimates Table B-1: Estimated Traffic Impact Fees From LUCE Development Project/Development Areas Traffic Impact Fees Single Family Multifamily Office Commercial Industrial Hotel Citywide Base TIF $3,516 $3,120 $7.051 $7.406 $2.036 $1,632 Foothill @ Santa Rosa Area $249,600 Caltrans Site $165,360 -$26,737 -$105,647 $326,400 General Hospital Site $31,644 $99,840 $344,004 Broad Street Area $1,837,680 $1,696,478 Sunset Drive-In Site $0 $1,838,238 $1,651,257 Dalidio / Madonna Area $1,125,120 $561,600 $1,057,650 $1,481,200 $326,400 Pacific Beach Site $0 $97,736 $350,744 $0 Calle Joaquin Auto Sales Area $781,203 $161,520 Madonna Site on LOVR $295,780 $97,484 $884,500 $187,094 LOVR Creekside Area $408,948 Broad St. @ Tank Farm Rd. Site $0 $127,920 $515,992 $464,549 $0 Avila Ranch $1,174,095 $758,740 $152,500 Chinatown Project $0 $99,840 $0 $340,676 $127,000 Pacific Courtyards $0 $37,440 $70,510 $0 $0 Mission Estates $35,160 $0 $0 $0 $0 Four Creeks (Creekston and Laurel Creek) $0 $517,920 $0 $0 $0 Garden Street Terrace $0 $24,960 $0 $185,150 $104,000 313 South Street Apartments $0 $134,160 $0 $0 Marsh Street Commons $0 $34,320 $0 $22,218 ICON project (1340 Taft) $0 $21,840 $0 $29,624 Margarita Area Specific Plan $1,919,931 $291,846 $5,219,930 $51,950 Airport Area Specific Plan $6,345,900 $2,359,343 $1,522,199 Orcutt Area Specific Plan $1,898,640 $1,369,680 $81,466 Suburban Residential4 $14,064 $0 $0 $0 Low Density Residential $1,125,120 $0 $0 $0 Medium Density Residential $249,636 $0 $0 $0 Medium-High Density Residential $18,720 $0 $0 High Density Residential $159,120 $0 $0 Neighborhood Commercial5 $0 $0 $19,359 Community Commercial5 $0 $0 $309,704 Tourist Commercial5 $0 $0 $112,912 Office4 $0 $139,751 Services and Manufacturing $0 $0 $294,888 Public $0 $0 PC1 - 43 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 38 Administrative Draft Fiscal Analysis August 2014 Project/Development Areas Traffic Impact Fees Single Family Multifamily Office Commercial Industrial Hotel LOVR Sub Area $8,878 $6,506 $13.402 $20.556 $4,611 Pacific Beach Site $149,492 $831,206 Madonna Site on LOVR $452,410 $2,096,120 $453,835 LOVR Creekside Area $1,034,454 $0 $0 $0 Calle Joaquin Auto Sales Area $0 $0 $1,851,322 $391,800 Avila Ranch $2,425,545 $1,160,530 $361,400 MASP Sub Area $12,320 $8,306 $23.746 $49.406 Margarita Area Specific Plan $7,197,333 $761,111 $17,621,937 $437,870 AASP Sub Area $3,516 $3,120 $11.745 $7.424 $2.850 Broad St@Tank Farm Rd. $94,721 $334,213 $754,427 Avila Ranch $1,339,474 $681,531 $300,683 Airport Area Specific Plan⁸ $4,110,300 $2,205,097 $796,986 OASP Sub Area $12,171 $8,912 $7.051 $31.100 Orcutt Area Specific Plan $4,250,340 $2,413,622 $342,104 TOTAL BY LAND USE $22,786,102 $14,060,921 $37,669,172 $20,049,414 $2,614,073 $2,078,049 GRAND TOTAL $99,257,732 Source: San Luis Obispo City Staff Note: Impact fees shown for Special Planning areas such as Dalidio/San Luis Ranch (SP-3), Avilla Ranch (SP-4), and Madonna property on LOVR (SP-2) are illustrative only and will need finalization/amendment when specific projects are submitted and development agreements, if necessary, are negotiated. PC1 - 44 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 39 August 2014 Table B-2: Estimated Water Impact Fees from LUCE Development Project/Development Areas Water Impact Fees Single Family Multifamily Office Commercial Industrial Hotel Citywide Base TIF $10,775 $7,542 $3.879 $4.310 $3.879 $10.775 Foothill @ Santa Rosa Area $603,360 Caltrans Site $399,726 $1,293,000 General Hospital Site $96,975 $241,344 $189,249 Broad Street Area $4,442,238 $987,283 Sunset Drive-In Site $0 $1,011,279 $960,966 Dalidio / Madonna Area $3,448,000 $1,357,560 $581,850 $862,000 $1,293,000 Pacific Beach Site $0 $286,596 $247,821 $0 Broad St. @ Tank Farm Rd. Site $0 $309,222 $283,865 $270,349 $0 Chinatown Project $0 $241,344 $0 $198,260 $504,270 Pacific Courtyards $0 $90,504 $38,790 $0 $0 Mission Estates $107,750 $0 $0 $0 $0 Four Creeks (Creekston & Laurel Creek) $0 $1,251,972 $0 $0 $0 Garden Street Terrace $0 $60,336 $0 $107,750 $465,480 313 South Street Apartments $0 $324,306 $0 $0 Marsh Street Commons $0 $82,962 $0 $12,930 ICON project (1340 Taft) $0 $52,794 $0 $17,240 Suburban Residential $43,100 $0 $0 $0 Low Density Residential $3,448,000 $0 $0 $0 Medium Density Residential $765,025 $0 $0 $0 Medium-High Density Residential $45,252 $0 $0 High Density Residential $384,642 $0 $0 Neighborhood Commercial $0 $0 $11,266 Community Commercial $0 $0 $180,236 Tourist Commercial $0 $0 $65,710 Office $0 $76,882 Services and Manufacturing $0 $0 $561,823 Public $0 $23,654 Madonna Site on LOVR $0 $867,330 $65,051 $1,017,160 $0 $898,635 LOVR Creekside Area $0 $1,199,178 $0 $0 $0 $0 Calle Joaquin Auto Sales Area $0 $0 $0 $551,964 $0 $775,800 Avila Ranch $4,363,875 $2,224,890 $0 $107,750 $0 $0 Margarita Area Specific Plan $7,984,275 $957,834 $3,720,027 $43,100 $0 $0 Airport Area Specific Plan $0 $0 $1,657,074 $2,659,197 $2,900,103 $0 Orcutt Area Specific Plan $5,818,500 $3,310,938 $0 $47,410 $0 $0 TOTAL BY LAND USE $26,075,500 $18,734,328 $7,647,720 $8,348,392 $3,461,926 $5,230,185 GRAND TOTAL $69,498,051 Source: ADE, based on City of San Luis Obispo Fee Structure. PC1 - 45 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 40 Administrative Draft Fiscal Analysis August 2014 Table B-3: Estimated Wastewater Impact Fees from LUCE Development Project/Development Areas Wastewater Impact Fees Single Family Multifamily Office Commercial Industrial Hotel Citywide Fee $3,729 $2,610 $1.342 $1.492 $1.342 $3.729 Foothill @ Santa Rosa Area $208,800 Caltrans Site $138,330 $447,480 General Hospital Site $33,561 $83,520 $65,495 Broad Street Area $769,645 $170,839 Sunset Drive-In Site $0 $349,982 $332,570 Pacific Beach Site $0 $99,180 $85,766 $0 $0 Chinatown Project $0 $83,520 $0 $68,614 $174,517 Avila Ranch $3,761,235 $1,917,500 $0 $92,870 $0 $0 Pacific Courtyards $0 $31,320 $13,424 $0 $0 Mission Estates $37,290 $0 $0 $0 $0 Four Creeks (Creekston & Laurel Creek) $0 $433,260 $0 $0 $0 Garden Street Terrace $0 $20,880 $0 $37,290 $161,093 313 South Street Apartments $0 $112,230 $0 $0 Marsh Street Commons $0 $28,710 $0 $4,475 ICON project (1340 Taft) $0 $18,270 $0 $5,966 Suburban Residential $14,916 $0 $0 $0 Low Density Residential $1,193,280 $0 $0 $0 Medium Density Residential $264,759 $0 $0 $0 Medium-High Density Residential $15,660 $0 $0 High Density Residential $133,110 $0 $0 Neighborhood Commercial $0 $0 $3,899 Community Commercial $0 $0 $62,376 Tourist Commercial $0 $0 $22,741 Office $0 $26,607 Services and Manufacturing $0 $0 $194,435 Public $0 $8,186 Laguna Catchment Area $4,219 $2,953 $1.519 $1.688 $1.519 $4.219 Dalidio / Madonna Area $1,350,080 $531,540 $227,826 $337,520 $0 $506,280 Calle Joaquin Catchment Area $5,558 $3,890 $2.001 $2.223 $2.001 $5.558 Madonna Site on LOVR $447,350 $33,555 $524,675 $0 $463,537 LOVR Creekside Area $618,510 $0 $0 $0 $0 Calle Joaquin Auto Sales Area $0 $0 $284,716 $0 $400,176 Silver City Catchment Area $1,356 $1,280 $0.488 $0.542 $0.488 $1.356 Margarita Area Specific Plan $251,199 $40,640 $0 $0 Margarita Catchment Area $6,474 $4,532 $2.331 $2.590 $2.331 $6.474 Margarita Area Specific Plan $1,679,032 $431,673 $0 $0 $0 $0 Tank Farm Catchment Area $7,359 $5,151 $2.649 $2.944 $2.649 $7.359 Broad Street Area $1,516,970 $337,142 PC1 - 46 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 41 August 2014 Project/Development Areas Wastewater Impact Fees Single Family Multifamily Office Commercial Industrial Hotel Margarita Area Specific Plan $2,181,208 $654,177 $2,540,666 $29,436 $0 $0 Airport Area Specific Plan $0 $0 $1,131,731 $1,816,151 $1,980,683 $0 Broad St. @ Tank Farm Rd. Site $0 $211,191 $193,871 $184,640 $0 $0 Orcutt Area Specific Plan $3,973,860 $2,261,289 $0 $32,380 $0 $0 TOTAL BY LAND USE $14,740,420 $10,806,275 $4,591,345 $4,434,066 $2,175,118 $2,153,083 GRAND TOTAL $38,900,306 Source: ADE, based on City of San Luis Obispo Fee Structure. PC1 - 47 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Page 42 Administrative Draft Fiscal Analysis August 2014 Table B-4: Parks and Open Space Fees Project/Development Areas Water Impact Fees Single Family Multifamily Office Commercial Industrial Citywide Base TIF $5,668 $4,494 Foothill @ Santa Rosa Area $0 $359,520 Caltrans Site $0 ($15,728) General Hospital Site $51,012 $143,808 Broad Street Area $0 $2,646,966 Dalidio / Madonna Area $498,982 $222,541 Pacific Beach Site $0 $170,772 Broad St. @ Tank Farm Rd. Site $0 $184,254 Chinatown Project $0 $143,808 Pacific Courtyards $0 $53,928 Mission Estates $56,680 $0 Four Creeks (Creekston & Laurel Creek) $0 $746,004 Garden Street Terrace $0 $35,952 313 South Street Apartments $0 $193,242 Marsh Street Commons $0 $49,434 ICON project (1340 Taft) $0 $31,458 Suburban Residential4 $22,672 $0 Low Density Residential $1,813,760 $0 Medium Density Residential $402,428 $0 Medium-High Density Residential $0 $26,964 High Density Residential $0 $229,194 Madonna Site on LOVR $0 $516,810 LOVR Creekside Area $0 $184,526 Avila Ranch $2,295,540 $1,325,730 MASP Sub Area $8,247 $6,945 Margarita Area Specific Plan $6,111,027 ($116,375) AASP Open Space Fee $166,604 $354,148 $390,269 TOTAL BY LAND USE $11,257,769 $7,137,302 $166,604 $354,148 $390,269 GRAND TOTAL $19,306,093 Source: ADE, based on City of San Luis Obispo Fee Structure. PC1 - 48 FFIISSCCAALL IIMMPPAACCTT AANNAALLYYSSIISS SSaann LLuuiiss OObbiissppoo GGeenneerraall PPllaann UUppddaattee Administrative Draft Fiscal Analysis Page 43 August 2014 PC1 - 49 1 Land Use Element Policy Input Policy Input Land Use Element Chapter 1 Com- ment # Commenter Chapter Policy # Input Policy Response A2-1 Cal Poly Chapter 1 (LUE) 1.12.3 Rationale for annexation of Cal Poly should be stated. New policy 1.12.3 directs the City to analyze the costs/benefits to annexing Cal Poly. No changes proposed by staff. Policy Input Land Use Element Chapter 2 Com- ment # Commenter Chapter Policy # Input Policy Response P12-4 Kovesdi Chapter 2 (LUE) 2.2.7 Comment recommended adding "protect in kind" or "create in kind habitat off site" Not recommended for addition to this policy which directs residential developments to preserve and incorporate natural features. P12-5 Kovesdi Chapter 2 (LUE) 2.2.9 G(b) Comment recommended adding "healthy and native" to policy that directs new development to maintain mature trees on site. Not recommended for addition to this policy. The policy already has provisions for "feasibility" that would address concerns about restoration projects and non-native trees. P13- 15 Lopes Chapter 2 (LUE) 2.2.9 Concern that criteria defining “compatible development” may encourage increased density and zone changes in neighborhoods. Recommend policy updates as follows: 2.2.9 Compatible Development…..All multifamily development and large group-living facilities shall be compatible with any nearby, lower density development. Compatibility for all development shall be evaluated using the following criteria:...H. Housing Diversity. A mix of housing types, and a range of density within a neighborhood an area is generally desirable (see also Policy 2.1.6) PC1 - 50 2 Policy Input Land Use Element Chapter 3 Com- ment # Commenter Chapter Policy # Input Policy Response P2-5 Sierra Club Chapter 3 (LUE) 3.5.7.8 Wants additional language to reflect OS areas are acquired and maintained for use of residents and tourism programs are not to include national marketing of City OS areas. The areas impacted by overuse are popular areas for both tourists and residents and should be addressed by specific actions to address each situation. Survey currently underway to develop profile of open space users to better understand demographics. No change to program proposed. P2-6 Sierra Club Chapter 3 (LUE) 3.5.7.1 2 Requests removing specific reference to Economic Development Strategic Plan (EDSP) EDSP went through public process (4 workshops and hearings) and incorporates city policies for development’s responsibility to bear cost of facilities and services required to serve it. Removing specific reference to EDSP in this program will not remove Council direction to implement it. Policy Input Land Use Element Chapter 6 Com- ment # Commenter Chapter Policy # Input Policy Response P2-7 Sierra Club Chapter 6 (LUE) 6.4.5 Request to replace “encourage” with “require” for rainwater percolation from roof- hardscape areas. Existing stormwater regulations apply. P2-8 Sierra Club Chapter 6 (LUE) 6.4.6 Request to replace “encourage” with “require” for project designs that minimize drainage concentrations. Existing stormwater regulations apply. P2-9 Sierra Club Chapter 6 (LUE) 6.5.1 Request to restore deleted language specifying approaches to flood protection. Not recommended to specify particular approaches that may no longer meet FEMA or Stormwater regulations. Broader policy language to support flood plain standards is appropriate. PC1 - 51 3 Policy input Land Use Element Chapter 8 Com- ment # Commenter Chapter Policy # Input Policy Response A2-2 Cal Poly Chapter 8 (LUE) 8.3.3.1 3 CalFire /Cal Poly site shows up in Cal Poly Master Plan as designated for Faculty and Staff housing. Update Plan to show this designation. Update policy to state, "The Cal Poly Master Plan currently designates this area for Faculty and Staff housing. The City shall collaborate….." A6-7 SLOCOG Chapter 8 (LUE) 8.3.3.8 Executive summary mentions need to reflect Homeless Center use of Prado/Sunset Drive-in Site but doesn’t mention RTA new facility at this location. Policy 8.3.3.8 includes reference to both Homeless Services center and transportation agency use. Staff recommends retaining Office designation for this portion of the site to ensure LUCE update does not create non-conforming use. P2-10 Sierra Club Chapter 8 (LUE) 8.3.2.6 Delete provision for meeting a portion of open space requirement off-site Task Force generated this concept and it was carried through PC and CC. P16- 13 Mila Vujovich- LaBarre Chapter 8 (LUE) 8.3.2.4 San Luis Ranch should be retained for agriculture. Policy in LUCE provides for development consistent with current policy direction to retain 50% open space/ag. P16- 16 Mila Vujovich- LaBarre Chapter 8 (LUE) 8.3.3.1 Need access for pedestrians and bikes across Santa Rosa This circulation alternative is part of the LUCE but wasn’t explicit in the land use policy direction for this site. Recommend clarifying policy direction: “Redevelopment plans shall include consideration of improving the existing complex intersections of Foothill/Chorro/Broad, the desirability of modifying Boysen at and through the property on the northeast corner of the area, and enhancement of pedestrian, bicycle and transit connections across Foothill and Santa Rosa/Highway 1 and to the campus.” PC1 - 52 4 Policy Input Land Use Element Chapter 9 Com- ment # Commenter Chapter Policy # Input Policy Response P2-11 Sierra Club Chapter 9 (LUE) 9.3.7D Request to expand policy supporting grey water systems to include a builder incentive program to build new homes with an onsite water recycling system included. In 2009 the state amended the grey water regulations to make it easier to install a “simple” system which uses washing machine water only and doesn’t require a permit to install. A full home recycling grey water system is supposed to be designed to match the output of the house which includes the number of occupants and size of the landscape and it is illegal to store grey water. Therefore, while a house may be plumbed to be grey water-ready, it could not actually have an installed system until all the variables are known. Recommend policy be updated to state, “Utilize plumbing fixtures that conserve or reuse water such as low flow faucets or grey water systems, and encourage new homes to be constructed to be grey water ready.” P5-3 DiGangi Chapter 9 (LUE) No specific policies Add electric vehicle charging stations to residential developments. Add incentives to development that incorporate features that off-set operational energy use. Incorporate requirements for buildings to be solar- ready. Add these as examples to draft programs: “Incentive Program: The City shall consider the feasibility of providing incentives for new and renovated projects that incorporate sustainable design features such as constructing new buildings that are solar ready, or off-setting significant operational energy use through use of solar water heating, photovoltaic systems, geothermal or wind energy systems.” “Building Code Update: The City shall regularly review and update its building code and ordinances to identify revisions to promote energy efficient building design and construction practices, for example by including requirements for electric PC1 - 53 5 vehicle charging stations for new residential developments.” P5-3 DiGangi Chapter 9 (LUE) 9.3.7 G Add “trees” in addition to building elements to address Solar Shade Act. Public Resources Code contains provisions that restrict height of vegetation on properties adjoining properties with solar collectors. Prior notice is required and local ordinance may modify or opt not to apply PRC code. If Commission is interested in including this concept, staff recommends adding a new program in Chapter 9 that directs the City to explore local conditions to support the Solar Shade Act as reflected in PRC 25980-25986. PC1 - 54 6 Circulation Element Policy Input Policy Input Circulation Element Chapter 1 Com- ment # Commenter Chapter Policy # Input Policy Response P2-12 Sierra Club Chapter 1 (CE) 1.9 1A Request to expand language in objective. Support updated language for objective 1.9: A. “The City will continue to support the use and development of compressed natural gas and biodiesel fueling stations, EV recharging stations, and other alternative fuel stations in the San Luis Obispo area.” Policy Input Circulation Element Chapter 2 Com- ment # Commenter Chapter Policy # Input Policy Response A2-3 Cal Poly Chapter 2 (CE) 2.1.4 Request to expand language. Support updated language, “The City shall continue to work with Cal Poly, Cuesta College and other…..” P2-13 Sierra Club Chapter 2 (CE) 2.0.3 Request to restore text requiring mandatory trip reduction. Per SB 437 (Lewis), the language was removed because it is inconsistent with current State law (code 40717.9 in Health and Safety regulations). Replacement text emphasizes commuter benefit options instead. Policy Input Circulation Element Chapter 3 Com- ment # Commenter Chapter Policy # Input Policy Response A6- 26 SLOCOG Chapter 3 (CE) 3.0.3 Request to edit language regarding seniors and persons with disabilities. Staff supports. See PH6-6 below for language. PC1 - 55 7 P2-14 Sierra Club Chapter 3 (CE) 3.0.6 Request to restore bullet point directing frequency of transit service to compare favorably to use of private vehicle. If Commission wishes to retain direction regarding transit service frequency, staff recommends: “The frequency of City transit service will not pose a barrier to this mode choice.” PH6- 6 Mass Transit Committee Chapter 3 (CE) 3.0.3, 3.0.4, 3.1.4 Requests for updated language. Supported by staff: 3.03 The City shall continue to support paratransit service for the elderly and disabled persons provided seniors and persons with disabilities by public and private transportation providers. 3.0.4 Campus Service. The City shall continue to work with Cal Poly to maintain and expand the free fare subsidy program".... 3.1.4 The City shall coordinate with the San Luis Obispo Regional Transit Authority (SLORTA) to evaluate the cost effectiveness of benefits and drawbacks of coordinated and consolidated service. Policy Input Circulation Element Chapter 4 Com- ment # Commenter Chapter Policy # Input Policy Response P15-1 and P15-5 Santa Maria Valley Railroad Chapter 4 (CE) 4.1.6 Concern that bikeways and pedestrian paths in railroad rights of way are not compatible due to security problems and potential to block adjacent properties’ access to be served by rail. No change to policy or program is proposed. Policy Input Circulation Element Chapter 6 Com- ment # Commenter Chapter Policy # Input Policy Response P2-15 Sierra Club Chapter 6 (CE) 6.0.5 Remove text that references “fair share” No change to policy is proposed by staff. “Fair share” has roots in proportional nexus in case law and PC1 - 56 8 Commission and Council should discuss and provide direction. Policy Input Circulation Element Chapter 9 Com- ment # Commenter Chapter Policy # Input Policy Response P2-16 Sierra Club Chapter 9 (CE) 9.0.1 Request to remove reference to "fair share" and include language "as mitigation for the impacts of development". No change to policy is proposed by staff. “Fair share” has roots in proportional nexus in case law and Commission and Council should discuss and provide direction. P2-17 Sierra Club Chapter 9 (CE) 9.1.6 Request to add reference to “complete streets” model. No change to policy is proposed by staff. This policy addresses appearance of streets and roads. Addition of complete streets model, which is addressing mode share of right-of-way, is covered in policy 6.0.1. Policy Input Circulation Element Chapter 12 Com- ment # Commenter Chapter Policy # Input Policy Response P15-7 Santa Maria Valley Railroad Chapter 12 (CE) 12.1.3 Request to remove policy regarding idling trains. No changes to policy are recommended. Commenter response relates to GHG emissions but policy also addresses noise concerns to surrounding neighborhoods. Policy Input Circulation Element Chapter 14 Com- ment # Commenter Chapter Policy # Input Policy Response P2-18 Sierra Club Chapter 14 (CE) New Request to add new policy: 14.0.4 Unbundled parking: The City shall introduce unbundled parking, congestion Schools are superior agencies and City cannot set policy for them. General intent of unbundled parking is accomplished through downtown parking in-lieu districts and in zoning provisions that allow for parking PC1 - 57 9 pricing, shared parking, fair price policies, positive transportation demand management (TDM) and the other components of an Intelligent Parking program for schools and government buildings with the goal of creating a Request for Proposal process for full implementation. modifications for projects that include car-sharing, employer-paid transit passes, off-peak work hours and/or trip reduction plans. Policy Input Circulation Element Chapter 15 Com- ment # Commenter Chapter Policy # Input Policy Response A6- 28 SLOCOG Chapter 15 (CE) 15.0.5 Request to remove reference to US 101 Aesthetic study Revise D to read, "Actively participating in the development and periodic updates of the Caltrans US 101 Aesthetic Study of San Luis Obispo County. Policy Input Circulation Element Chapter 16 Com- ment # Commenter Chapter Policy # Input Policy Response P15-2 Santa Maria Valley Railroad Chapter 16 (CE) 16.0.2 Request to specifically address freight mobility as a benefit to regional congestion. No change to policy is proposed by staff. Policy 16.0.2 encourages programs that reduce dependence on single occupant vehicles and encourages use of alternative modes without listing them. Rail is an alternative mode. P2-20 Sierra Club Chapter 16 (CE) 16.1.2 Request to remove reference to “fair share”. No change to policy is proposed by staff. “Fair share” has roots in proportional nexus in case law and Commission and Council should discuss and provide direction. PC1 - 58 RESOLUTION NO. XXXX-14 A RESOLUTION OF THE SAN LUIS OBISPO PLANNING COMMISSION RECOMMENDING THE CITY COUNCIL APPROVE UPDATES TO CHAPTERS 6-10 AND 12-16 OF THE CIRCULATION ELEMENT OF THE GENERAL PLAN (GPI/ER 15-12) WHEREAS, the Planning Commission of the City of San Luis Obispo conducted public hearings in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on December 12th and 16th, 2013, for the purpose of reviewing recommendations of the Task Force for the Land Use and Circulation Elements Update (TF-LUCE) and recommending a set of policy changes for the Land Use and Circulation Elements (LUCE) to be studied through the environmental review process; and WHEREAS, the City Council of the City of San Luis Obispo reviewed the recommendations of the Planning Commission at public hearings conducted January 14th and 28th, 2014 in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, for the purpose of endorsing a LUCE update project description to be considered through the Environmental Impact Report (EIR) process; and WHEREAS, the Draft EIR was released on June 13, 2014 with a 45 day comment period that closed on July 28, 2014 and the Final EIR was issued on September 3, 2014; and WHEREAS, the Planning Commission of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on September 17, 2014, for the purpose of considering updates and amendments to Chapters 6-10 and 12-16 of the Circulation Element; and WHEREAS, said public hearing was for the purpose of formulating and forwarding recommendations to the City Council of the City of San Luis Obispo regarding the project; and WHEREAS, notices of said public hearing were made at the time and in the manner required by law; and WHEREAS, the Planning Commission has duly considered all evidence, including the testimony of the public and interested parties, the Draft EIR, and comments and responses provided in the Final EIR, and the evaluation and recommendations by staff, presented at said hearing. NOW, THEREFORE, BE IT RESOLVED by the Planning Commission of the City of San Luis Obispo as follows: Section 1. Findings. Based upon all the evidence, the Commission makes the following findings: PC1 - 59 Planning Commission Resolution # XXXX-14 GPI/ER 15-12, CE Chapters 6-10 & 12-16 Page 2 1. Recommended Chapter 6 of the Circulation Element establishes Multi-modal circulation policies, level of service objectives, multi-modal priorities, circulation significance thresholds, and mitigation policies. 2. Recommended updates to Chapters 7 and 8 (previous CE Ch. 6 & 7) of the Circulation Element provide new policies to minimize unnecessary vehicular infrastructure, allocate transportation funding across various modes of transportation, and to reduce and maintain vehicular speeds in residential neighborhoods, and to identify and address regional cut-through traffic issues in the City. 3. Recommended updates to Chapters 9 & 10 update Street Network and Truck Transportation Chapters of the Circulation Element to require public participation in the planning and design of major changes to the street network and include a policy that the City shall adopt an ordinance regulating the movement of heavy vehicles. 4. Recommended updates to Chapter 12 of the Circulation Element add rail transportation policies to encourage increased availability of passenger rail service and to enhance City transit service to transit station and to work with the train station management to upgrade the facility and visitor services. 5. Recommended updates to Chapter 13 update parking management policies related to short term parking, establishment of park and ride lots, curb parking evaluation, and the approval and construction of public parking structures. 6. Recommended updates to Chapter 14 of the Circulation Element include policies to protect residential neighborhoods from parking demand generated by adjacent high- intensity uses and for the City to update the review criteria and clarify the process for establishing neighborhood parking districts. 7. Recommended updates to Chapter 15 of the Circulation Element include policy direction for development along scenic roadways and the nighttime visual environment per the City’s Night Sky Preservation Ordinance. 8. Recommended updates to Chapter 16 of the Circulation Element include additional emphasis on the City’s financial decisions and alignment with circulation policies and programs and encourage the City to actively participate in regional transportation issues. Section 2. Environmental. The Draft EIR for the Land Use and Circulation Element Update was on June 13, 2014 with a 45-day comment period that closed on July 29, 2014 and the Final EIR was issued on September 3, 2014. For each identified potentially significant effect under the categories of Agricultural Resources, Cultural Resources, and Public Services, mitigation measures were included and incorporated into the LUCE Update project which reduces the identified potentially significant adverse impacts to less than significant levels. The significant effects identified in the Air Quality, Traffic and Circulation, and Noise sections of the PC1 - 60 Planning Commission Resolution # XXXX-14 GPI/ER 15-12, CE Chapters 6-10 & 12-16 Page 3 EIR will not be fully mitigated to a degree of insignificance with the incorporation of all the identified mitigation measures included in the EIR. On September 10, 2014, the Planning Commission reviewed and recommended Council certify the FEIR and adopt a Statement of Overriding Considerations that the project benefits warrant project approval despite the identified adverse environmental impacts. Section 3. Recommendation. The Planning Commission does hereby recommend the City Council adopt proposed amendments to Circulation Element Chapters 6-10 & 12-16 contained in the legislative draft considered at the hearing on September 17, 2014, with modifications made during the hearing by the Planning Commission; an official copy of which shall be maintained in the Community Development Department referencing this resolution. On motion by Commissioner _____, seconded by Commissioner _____, and on the following roll call vote: AYES: NOES: REFRAIN: ABSENT: The foregoing resolution was passed and adopted this 17th day of September, 2014. _____________________________ Doug Davidson, Secretary Planning Commission by: PC1 - 61 RESOLUTION NO. XXXX-14 A RESOLUTION OF THE SAN LUIS OBISPO PLANNING COMMISSION RECOMMENDING THE CITY COUNCIL APPROVE AMENDMENTS TO GENERAL PLAN LAND USE DESIGNATIONS AND ZONING FOR SPECIAL FOCUS AREAS ASSOCIATED WITH THE UPDATE TO THE LAND USE AND CIRCULATION ELEMENTS OF THE GENERAL PLAN (GPI/ER 15-12) WHEREAS, the Planning Commission of the City of San Luis Obispo conducted public hearings in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on December 12th and 16th, 2013, for the purpose of reviewing recommendations of the Task Force for the Land Use and Circulation Elements Update (TF-LUCE) and recommending a set of policy changes for the Land Use and Circulation Elements (LUCE) to be studied through the environmental review process; and WHEREAS, the City Council of the City of San Luis Obispo reviewed the recommendations of the Planning Commission at public hearings conducted January 14th and 28th, 2014 in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, for the purpose of endorsing a LUCE update project description to be considered through the Environmental Impact Report (EIR) process; and WHEREAS, the Draft EIR was released on June 13, 2014 with a 45 day comment period that closed on July 28, 2014 and the Final EIR was issued on September 3, 2014; and WHEREAS, the Planning Commission of the City of San Luis Obispo conducted a public hearing in the Council Chamber of City Hall, 990 Palm Street, San Luis Obispo, California, on September 17 and 18, 2014, for the purpose of considering General Plan Land Use Element diagram and Zoning map changes associated with the update of the Land Use and Circulation Elements of the General Plan, WHEREAS, said public hearing was for the purpose of formulating and forwarding recommendations to the City Council of the City of San Luis Obispo regarding the project; and WHEREAS, notices of said public hearing were made at the time and in the manner required by law; and WHEREAS, the Planning Commission has duly considered all evidence, including the testimony of the public and interested parties, the Draft EIR, and comments and responses provided in the Final EIR, and the evaluation and recommendations by staff, presented at said hearing. NOW, THEREFORE, BE IT RESOLVED by the Planning Commission of the City of San Luis Obispo as follows: PC1 - 62 Planning Commission Resolution # XXXX-14 GPI/ER 15-12, Land Use Element diagram and Zoning Map amendments Page 2 Section 1. Findings. Based upon all the evidence, the Commission makes the following findings: 1. Proposed amendments to Land Use Element designations and Zoning map changes associated with the update to the Land Use and Circulation Element project support development and redevelopment of sites that will accommodate the community’s future growth. 2. Recommended amendments to Land Use Element designations and Zoning map changes associated with the update to the Land Use and Circulation Element project correspond to recommended policy direction to address development areas in the City or in the City’s urban reserve areas which have special constraints or considerations. 3. Proposed amendments to Land Use Element designations and Zoning map changes associated with the update to the Land Use and Circulation Element project present opportunities in the community to develop customized land use and circulation approaches or special design implementation to enhance their appearance and achieve their respective development potential in a manner that is consistent with community values. 4. Land Use Element mapping amendments and Zoning changes associated with implementation of the South Broad Street Area Plan are consistent with plans for redevelopment reviewed through a separate planning effort involving 27 public hearings and approximately 40 public outreach efforts. Section 2. Environmental. The Draft EIR for the Land Use and Circulation Element Update was on June 13, 2014 with a 45-day comment period that closed on July 29, 2014 and the Final EIR was issued on September 3, 2014. For each identified potentially significant effect under the categories of Agricultural Resources, Cultural Resources, and Public Services, mitigation measures were included and incorporated into the LUCE Update project which reduces the identified potentially significant adverse impacts to less than significant levels. The significant effects identified in the Air Quality, Traffic and Circulation, and Noise sections of the EIR will not be fully mitigated to a degree of insignificance with the incorporation of all the identified mitigation measures included in the EIR. On September 10, 2014, the Planning Commission reviewed and recommended Council adoption of a Statement of Overriding Considerations that the project benefits warrant project approval despite the identified adverse environmental impacts. Section 3. Recommendation. The Planning Commission does hereby recommend the City Council adopt proposed amendments as shown on the draft Land Use Element diagram and draft Zoning Diagram considered at the hearing on September 17, 2014, with modifications made during the hearing by the Planning Commission; an official copy of which shall be maintained in the Community Development Department referencing this resolution and as described below: PC1 - 63 Planning Commission Resolution # XXXX-14 GPI/ER 15-12, Land Use Element diagram and Zoning Map amendments Page 3 Area General Plan Designation Associated Zoning Alrita area: Change from Interim Open Space to Low Density Residential R-1 Low Density Residential Bella Montana area: Change from Interim Open Space to Medium Density Residential R-2 Medium Density Residential Bishop Knoll / Foothill area: Change from Interim Open Space to Low Density Residential R-1 Low Density Residential Cal Poly/Calfire area: Change from Interim Open Space to Public Facilities PF Public Facilities Creekside/LOVR area: Change from Interim Open Space to Low (south side) and Medium (north side) Density Residential and Open Space R-1 and R-2 Low (south side) and Medium (north side) Density Residential Foothill/Santa Rosa area: Change from Neighborhood Commercial to Community Commercial on both sides of Foothill between Chorro and Santa Rosa. Retain existing General Retail. C-C Community Commercial. General Hospital area: Change from Low Density Residential to Low and Medium density Residential and Public Facilities R-1 Low Density Residential, R-2 Medium Density Residential, and PF Public Facilities Madonna Inn area: Change from Interim Open Space to Tourist Commercial, Agriculture and Open Space C-T Tourist Commercial and C/OS Conservation/Open Space South Broad Street area: Change from Services and Manufacturing to Community Commercial and Services and Manufacturing C-C Community Commercial and C-S Service Commercial Sunset Drive-in/Prado area: Change Office, Interim Open Space and Services and Manufacturing to Office and Community Commercial O Office and C-C Community Commercial Tank Farm/Broad area: Change from Business Park to Community Commercial C-C Community Commercial On motion by Commissioner _____, seconded by Commissioner _____, and on the following roll call vote: AYES: NOES: PC1 - 64 Planning Commission Resolution # XXXX-14 GPI/ER 15-12, Land Use Element diagram and Zoning Map amendments Page 4 REFRAIN: ABSENT: The foregoing resolution was passed and adopted this 18th day of September, 2014. _____________________________ Doug Davidson, Secretary Planning Commission by: PC1 - 65 Land Use Element Diagram Corrections Madonna Hills Area Proposed Correction Foothill @ Santa Rosa Area Proposed Correction Sunset Drive-In Area Proposed Correction PC1 - 66 Land Use Element Diagram Corrections General Hospital Area Proposed Correction PC1 - 67