The URL can be used to link to this page

Home My WebLink About04/27/1993 Item 3 - Retrofit Credit on Water Impact Fees IIIIII� II�IIIIIfIII��MI�IU "1 r ME NG c� ATE: o san lugs oB�spo ITEM NUMBER: COUNCIL AGENDA REP®RT FROM: William C. Statler, Director of Finance a Prepared by: Linda Asprion, Revenue Manager �7 SUBJECT: RETROFIT CREDIT ON WATER IMPACT FE11 ES CAO RECOMMENDATION - Adopt a resolution implementing an 87% credit on water impact fees when retrofitting is required as a condition of development.. DISCUSSION Background In August of 1988, the Council adopted the water retrofitting ordinance which requires retrofitting at a level that conserves twice the amount of water required by a new project, as a condition of development. Retrofitting is normally performed in homes or motel units where five gallon toilets are replaced with low-flow 1.5 gallon toilets and water saving showerheads and faucets are installed. The average cost to retrofit a bathroom is approximately $150, and approximately 20 homes need to be retrofitted to receive a single family residence (SFR) building permit, for a total cost of approximately $2,275 per SFR. On August 20, 1991, Council approved the implementation of water impact fees in the amount of $2,627.60 per single family dwelling and between $2,627.60 and $1.18,242.00, based on meter size, for non-residential facilities. This fee is based upon the costs of the Salinas Reservoir expansion and the water treatment plant expansion which are apportioned for new development. Based upon discussion with the Building Industry Association of the Central Coast (BIACO) and City staff, there is consensus that compliance with both the City's retrofit requirement and payment of full water impact fees should be discontinued. There are two factors supporting this recommendation: ■ The purpose of retrofitting is to generate the water necessary for new development by reducing current water consumption by other customers. ■ The purpose of the largest portion of the water impact fee (87%) is to pay for additional source of supply via the expansion of Salinas Reservoir. Conceptually, the purpose of both approaches is the same - to ensure that new development pays for the cost of supplying the raw water necessary to serve it. As such, requiring both retrofitting and paying the portion of water impact fees attributable to new water supplies should be discontinued. ��nlmiii�IIIIIII�P° ��UJN City Of San LUIS OBISPO OWNan COUNCIL AGENDA REPORT How much does it cost to retrofit for a new project? Below are some examples of projects and the approximate retrofitting costs that are incurred as a condition to build. It should be noted that these costs do not include administrative costs or City fees. Project -Retrofit Cost 50,000 square foot retail store $ 22,150 15,000 square foo` non-medical office $ 7,120 30,000 square foot light manufacturing $ 49,100 80 residential condominiums $126,000 1 condominium $ 1,575 How much are the water impact fees for a new project? Below are the estimated water impact fees for the same type of projects listed above. Project Water Im ap ct Fee 50,000 square foot retail store $ 16,816.64 15,000 square foot nonmedical office $ 10,510.40 30,000 square foot light manufacturing $ 27,327.04 80 residential condominiums $168,166.40 1 condominium $ 29102.08 How was the amount of Me proposed credit on water impact fees calculated? The water impact fee is comprised of two projects: the Salinas Reservoir expansion (87% of the fee) and the portion of cost attributable to the additional.capacity created by the new level of treatment/water quality at the water treatment plant (13% of the fee). Since the treatment plant improvements are driven by quality rather than capacity needs, this portion of the water impact fee (13%) is not included in the recommended credit. How will this proposed credit affect the amount of the water impact fee? The proposed credit is for an 87% reduction in the water impact fee for compliance with the retrofit requirement. This proposed credit will reduce residential water impact fees as follows: Unit Type Current Fee Reduced Fee Single Family Dwelling $2,627.60 $ 341.58 Duplex, Townhouse, Condominium, Apartment $29102.08 $ 273.27 .. Mobile Home $1,576.56 $ 204.95 �_a city of San WIS OBISp0 COUNCIL AGENDA REPORT For non-residential projects the water impact fee is based on the meter size. This proposed credit will reduce non-residential impact fees as follows: Meter Size Current.Fee Reduced Fee 5/8" - 3/4" $ 21627.60 $ 341.58 1" $ 5,255.20 $ 683.17 1 1/2" $ 10,510.40 $ 11366.35 2" $ 16,816.64 $ 2,186.16 3" $ 36,786.40 $ 4,782.23 4" $ 57,807.20 $ 7,514.93 6" $1.18,242.00 $15,371.46 Will all development receive the proposed credit on water impact fees? If retrofitting is required as a condition of development, the applicant will receive the proposed reduction in their water impact fees. When will the credit be effective? The credit will become effective upon adoption of the resolution. FISCAL IMPACT Under the City's current residential growth management plan (1% annually), it is estimated that approximately $688,400 in revenues will be generated from the current water impact fees. Assuming the retr(At requirements remain.mandatory, this revenue will be reduced to $89,500. However, in ,he current economic environment,very little revenue is projected to be generated from impact fees over the next 2 - 3 years. CONCURRENCES The Utilities and Community Development Department staffs have reviewed the proposed retrofit credit to the water impact fees, and they concur with the recommendation. SUMMARY Currently a developer is required to pay for retrofitting units that will conserve twice the amount of water allocated for use by a new project, as well as water impact fees for additional source of supply. Both of these requirements are intended to achieve the same purpose, and accordingly, it is recommended that a retrofit credit of 87% of the water impact fee be established if the applicant is required to retrofit as a condition of development. ATTACHMENT Resolution implementing an 87% retrofit credit on water impact fees JT'-3 RESOLUTION NO. (1993 SERIES) RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO SETTING FORTH A RETROFIT CREDIT ON WATER IMPACT FEES WHEREAS, the City of San Luis Obispo Municipal Code establishes a retrofitting requirement and water impact fees on development; and, WHEREAS, the -City. of San Luis Obispo has determined that requiring both retrofitting and payment of the portion of water impact fees.applicable to raw.water supplies should be discontinued; and WHEREAS, a study.was made to determine the appropriate amount of credit to be granted based on the amount of the water impact fee attributed to paying for raw water resources. NOW, THEREFORE, the City Council of the City of San Luis Obispo finds and resolves that a credit in the amount of 87% of the water impact fee shall be provided to applicants who are required to retrofit as a condition of development pursuant to the requirements of Municipal Code Chapter 17.89.030 B. Upon motion of seconded by and on the following roll call vote: AYES: NOES: ABSENT: the foregoing resolution was adopted this day of . 1993. Mayor Peg Pinard ATTEST: City Clerk Diane Gladwell APPROVED: tto./hey/ �— 1