CITY COUNCIL: Ordinance Establishing a Regional Development Impact Fee

Meeting Date: June 3, 2008
Prepared by: Rich Guillen

City Council
Agenda Item Summary

Name: Consideration of an Ordinance adding Chapter 3.36 to the Municipal Code
establishing a Regional Development Impact Fee (First Reading)

Description: At its August 2006 meeting, the Transportation Agency of Monterey County (TAMC) initiated an update to the regional transportation impact fee.
TAMC approved an Investment Plan for Transportation Sales Taxes that was
distributed at the May 20, 2008 City Council Meeting. The City Council adopted supporting resolutions to support the sales tax initiative.

The remaining action required by the City Council is to adopt a resolution establishing the fee program. The attached ordinance adds Chapter 3.36 “Regional Development Impact Fee” to the Municipal Code.

Overall Cost:
City Funds: $0
Grant Funds: $0

Staff Recommendation: Adopt the Ordinance as written.

Important Considerations: Fifty percent of the proposed sales tax funds will help
improve safety and reduce congestion along highways 1 and 101. An additional 25 percent will go to cities for local street maintenance. The remaining 25 percent will go towards alternative modes of transportation such as buses, bike
lanes, etc.

Decision Record: Adopted three resolutions in support of the sales tax initiative at a Special City Council meeting held on May 20, 2008.

Reviewed:


Rich Guillen, City Administrator Date


TRANSPORTATION AGENCY FOR MONTEREY COUNTY
Regional Development Impact Fee

Overview:
o The updated regional development impact fee program will generate $328 million (in 2007 $’s) in revenues out to 2030 as one source of funding for seventeen regionally‐significant projects.

o A key revision to the Nexus Study for a Regional Development Impact Fee is that fees are assessed by benefit zones; the 4‐zone scenario is comprised of North County, Greater Salinas, Monterey Peninsula & South Coast, and South County. The 4‐zone structure accounts for the characteristics of the key regions of the county covering the major population centers while still providing a mechanism for fees to fund projects in the region that they are collected.

o In order to receive input from the affected parties during the development of the study, the Transportation Agency established a Task Force comprised of key stakeholders including local government and business community members, which reviewed the fee program work.

o A credit against the regional fee is available for development in participating jurisdictions with local impact fee programs that include projects that overlap with the Regional Impact Fee.

Project List:
o The regional fee program proposes over $1 billion of transportation improvements, spread over 17 identified projects, and an additional $10 million in transit capital improvements:
o SR‐1 Sand City / Seaside Widening o SR‐68 Commuter Improvements
o SR‐68 CHOMP Widening o Harris Road / Eastside Connector
o SR‐156 Widening o G‐12 South (San Miguel Canyon)
o Marina – Salinas Corridor o G‐12 North (Hall Road)
o Del Monte / Lighthouse Corridor Improvements o US‐101 / Gloria Road Interchange (Gonzales)
o US‐101 San Juan Road Interchange o US‐101 / North & South Soledad Interchanges
o US‐101 South County Frontage Roads o US‐101 / Walnut Ave Interchange (Greenfield)
o Westside Bypass o US‐101 / First Street Interchange (King City)
55-B Plaza Circle, Salinas, California 93901-2902
(831) 775-0903 FAX (831) 775-0897 • E-mail: info@tamcmonterey.org • www.tamcmonterey.org

Impact Fee Schedule – 4 Zones:
LAND USE DESIGNATION NORTH COUNTY
GREATER SALINAS
PENINSULA / SOUTH COAST
SOUTH COUNTY
Residential Average (dwelling unit) $5,464 $3,644 $3,154 $4,608
Single-Family $6,167 $4,113 $3,586 $5,200
Apartment $4,330 $2,888 $2,518 $3,652
Condo/Townhome $3,776 $2,518 $2,196 $3,184
Multi-Family / Secondary Unit $4,330 $2,888 $2,518 $3,652
Retail (1,000 Sq. Ft.) $8,732 $5,824 $5,267 $7,364
Office / Government (1,000 Sq. Ft.) $7,131 $4,756 $4,324 $6,014
General Office $2,139 $1,427 $1,244 $1,804
Government Office $780 $520 $453 $658
Industrial / Agriculture (1,000 Sq. Ft.) $1,373 $915 $826 $1,157
Light Industrial $4,491 $2,995 $2,612 $3,788
Heavy Industrial $967 $645 $562 $815
Warehouse $290 $193 $169 $245
Manufacturing $2,462 $1,642 $1,431 $2,076
Lodging (room)
Hotel $5,265 $3,511 $3,061 $4,440
Motel $3,628 $2,420 $2,110 $3,059
Fee per Trip $644 $430 $375 $543

Legal Documents:
o The following legal documents are required for adoption by eight cities and the County in order to implement the regional development impact fee program:

1. Joint Powers Agreement
- The Joint Powers Agreement is the governing document for the Regional Development Impact Fee program. It establishes the Regional Development Impact Fee Agency as the implementing organization of the program, identifies key roles and responsibilities for member parties, and defines the project list, fee schedule, and benefit zone boundaries.

2. Regional Development Impact Fee Ordinance
- The Regional Development Impact Fee Ordinance adds a section to the adopting member
jurisdictions’ code for the establishment of a Regional Development Impact Fee Program as provided in the Joint Powers Agreement and defines the credits and exemptions contained in the program.

3. Form Resolution to Approve the Joint Powers Agreement
- The Resolution to Approve the Joint Powers Agreement signifies a member jurisdictions’ approval of the of the Regional Development Impact Fee Program as described in the Joint Powers Agreement and provides authority for the jurisdiction to enter into and execute the terms of the Joint Powers Agreement.
4. Form Resolution to Set the Initial Amount of Regional Development Impact Fees
- The Resolution setting the initial amount of the Regional Development Impact Fees references the draft fee schedule provided in the Joint Powers Agreement and establishes the base level of fees to be collected by the jurisdiction.


CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
ORDINANCE NO. 2008-
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA ADDING CHAPTER 3.36 TO THE CARMEL-BY-THE-SEA MUNICIPAL CODE ESTABLISHING A REGIONAL DEVELOPMENT IMPACT FEE

WHEREAS, the Carmel-by-the-Sea City Council finds that future development within the City of Carmel-by-the-Sea to the year 2030 will result in degradation of traffic levels of service on the regional transportation system of streets, arterials, and highways throughout the County of Monterey; and

WHEREAS, the Carmel-by-the-Sea City Council finds that failure to expand the capacity of the existing circulation system as new development is approved will increase congestion on the regional system, as documented in the Regional Development Impact Fee – Nexus Study Update (the “Study”) approved by the board of the Transportation Agency of Monterey County (“TAMC”) on January 16, 2008. TAMC commissioned the Study, which looks at, among other matters, future development and the planned future road improvements needed to serve the new development; and

WHEREAS, the Carmel-by-the-Sea City Council finds and declares that the fair-share traffic impact fee to be levied upon new development pursuant to this Chapter provides a mechanism to fund new developments’ share of regional transportation system improvements that are needed to mitigate congestion and related adverse impacts caused by the new development; and

WHEREAS, the Carmel-by-the-Sea City Council finds that exactions from new development
are necessary to provide a portion of the funding for the construction of the regional transportation improvements needed to accommodate traffic that will be generated by new development of land within the county; and

WHEREAS, the Carmel-by-the-Sea City Council finds that the Study has determined the extent to which the new development of land will generate traffic volumes impacting the regional transportation system and that this Chapter establishes a fair and equitable method for distributing the unfunded costs of transportation improvements necessary to accommodate the traffic volumes generated by such development; and

WHEREAS, the Carmel-by-the-Sea City Council finds there is a reasonable relationship
between the use of the Regional Development Impact Fee to pay for the construction of the Regional Transportation Improvement Projects and the type of development for which the Regional Development Impact Fee is charged in that all new development in the County, both residential and non-residential, will generate or contribute to the need for the Regional Transportation Improvement Projects in different degrees as further described in the Study; and

WHEREAS, the Carmel-by-the-Sea City Council finds that the cost estimates set forth in the TAMC 2007 Regional Development Impact Nexus Fee Study Update are reasonable cost estimates for constructing the Transportation Improvement Projects, and the Regional Development Impact Fees expected to be generated by future development will not exceed the projected costs of constructing the Transportation Improvement Projects; and

WHEREAS, the Carmel-by-the-Sea City Council also finds that the fees collected pursuant to this Chapter shall only be used to finance the Regional Transportation Improvement Projects. The City adopts this ordinance with the expectation that a required minimum number of TAMC member governing bodies will also adopt the Regional Development Impact Fee on a uniform basis and that the County and these other TAMC members will use the fees collected in a coordinated manner to provide for financing and construction of the Regional Transportation Improvement Projects; and

WHEREAS, the Carmel-by-the-Sea City Council has reviewed and considered the certified
Environmental Impact Report for the 2005 Monterey Bay Area Metropolitan Transportation Plan and Addendum thereto prepared by TAMC, the lead agency for the Regional Transportation Impact Fee for purposes of the California Environmental Quality Act (CEQA) (Public Resources Code section 21000, et. Seq. The Council of the City of Carmel-by-the-Sea, as Responsible Agency, has followed the process set forth in 14 Cal. Code of Regs 15096 and has made the apropriate findings to certify the Environmental Impact Report for this Project; and

WHEREAS, the Carmel-by-the-Sea City Council has authorized the execution and delivery of a Joint Powers Agreement (“JPA”) establishing a Regional Development Impact Fee Agency (“RDIF Agency”) to coordinate the activities of the parties to the JPA in connection with the collection, transmittal and expenditure of Regional Development Impact Fees (as defined herein).

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES ORDAIN AS FOLLOWS:

SECTION 1. The foregoing recitals are adopted as findings of the City Council as though set forth fully herein.

SECTION 2. Chapter 3.36, entitled “Regional Development Impact Fee”, shall be added to the City of Carmel-by-the-Sea Municipal Code.

SECTION 3. Section 3.36.010 of the City of Carmel by the Sea Municipal Code, entitled
“Terms and Definitions”, shall be added to Chapter 3.36 as shown in bold, italic text as follows:

3.36.010 Terms and Definitions
As used in this Chapter, the following definitions shall apply:

A. “Applicant” means the person or entity applying for a tract map, parcel map, tentative subdivision map, conditional use permit, land use permit, building permit or other land use entitlement for a new development project and their successors and assigns.

B. “RDIF Agency” refers to the Monterey County Regional Development Impact Fee Joint
Powers Agency.
C. “Regional Development Impact Fee”, or “the Fee,” or “RDIF” refers to the fees approved by the governing boards of the County and other TAMC members on new development within their respective jurisdictions and transmitted to the RDIF Agency as provided in the JPA. The project list for the Regional Development Impact Fee is in Exhibit “B” of the JPA.

D. “Regional Transportation Improvement Projects,” or “Projects” refers to those public improvements required to mitigate the regional impacts of new development on the roads, highways and arterials within the county as specified in Section 16-5.

SECTION 4. Section 3.36.020 of the City of Carmel-by-the-Sea Municipal Code, entitled
“Establishment of a Regional Fee”, shall be added to Chapter 3.36 as shown in bold, italic text as follows:

3.36.020 Establishment of a Regional Impact Fee

A. The Regional Development Impact Fee is hereby established in the amounts specified in a resolution to be adopted by the Carmel-by-the-Sea City Council for the purpose of paying for Regional Transportation Improvement Projects identified in Exhibit “B” of the JPA needed to meet increased demand created by traffic resulting from new development. The revenues raised from the impact fee shall be remitted to the RDIF Agency to be held, maintained, used and accounted for as required in Government Code section 66006 of the Mitigation Fee Act in a coordinated fashion, as provided in the JPA.

B. The Regional Development Impact Fee shall be automatically adjusted as of July 1 of each year following the first year after the effective date of this Chapter. The adjustment shall be calculated by TAMC as administrator of the RDIF Agency, based on the increase or decrease in the Engineering News Record Construction Cost Index for the San Francisco Bay Area for the period ending December 31 of the preceding calendar year.

C. In addition to the automatic adjustment set forth above, TAMC may recommend to the
County and other TAMC members that the Regional Development Impact Fee be increased to reflect revisions to the project list in the Monterey County Regional Transportation Plan, program revenue, increases in land values over the inflationary increase, or other factors.

D. Except as provided in Government Code sections 65961, 66474.2 and 66498.1 or as
otherwise provided by state or federal law or the exemptions set forth in Section 16-3 below, no tract map, parcel map, tentative subdivision map, conditional use permit, land use permit, building permit or other land use entitlement for a new development project shall be approved or issued unless payment of the fee is a condition of approval for any such entitlement. Prior to issuance of a building permit or at such other time as required by law, the City shall require the applicant to pay the Fee.

E. Impact fees shall be imposed and collected by the City and, along with any interest earned on the Fees while in the possession of the City, shall be transmitted by the City to the RDIF Agency on the first day of each month for all Fees collected during the prior month. The Fees shall be placed by the RDIF Agency in the Regional Transportation Impact Fee Trust Fund.

All interest or other earnings of the Fund shall be credited to the Fund.

SECTION 5. Section 3.36.030 of the City of Carmel-by-the-Sea Municipal Code, entitled
“Exemptions”, shall be added to Chapter 3.36 as shown in bold, italic text as follows:

3.36.30 Exemptions
In addition to any exemptions from the levy of development impact fees provided by law, including, as applicable, the levy of development impact fees which are the subject of a vested subdivision map, the following development projects are exempt from payment of the fee required by this Chapter:

A. The reconstruction of any building so long as the reconstructed building both continues a use of the same category as the prior use and generates the same or fewer trips as the original building and reconstruction commences and so long as the permit for reconstruction is issued within one (1) year from destruction of the building.

B. Development within the Fort Ord Reuse Agency (“FORA”) area that is subject to
transportation improvement fees for transportation projects within the FORA plan area.

C. Development pursuant to a development agreement that was entered prior to the Effective Date of the Joint Powers Agreement in accordance with the terms of the development agreement in effect prior to the Effective Date of the Joint Powers Agreement.

SECTION 6. Section 3.36.040 of the City of Carmel-by-the-Sea Municipal Code, entitled
“Credits or Reimbursements”, shall be added to Chapter 3.36 as shown in bold, italic text as follows:

3.36.40 Credits or Reimbursements
An applicant who constructs all or part of one of the Transportation Improvement Projects may be eligible for a credit or reimbursement, as provided herein.

A. Credit or Reimbursement for Regional Transportation Impact Projects funded by the
strategic expenditure plan.
An applicant may be eligible for a credit to be applied against payment of the Regional Transportation Impact Fee if the applicant constructs or dedicates right-of-way with respect to all or a part of one of the Transportation Improvement Projects that is, at the time the applicant enters into an agreement with the City for construction of such project, included in the prioritization plan of the strategic expenditure plan as a project to be funded.

An applicant may be eligible for a reimbursement if the cost of constructing such a
Transportation Improvement Project, or a part of such Project, exceeds the amount of the Regional Transportation Impact Fee to be paid by the applicant. The amount of
reimbursement shall equal the difference between the cost of constructing all or a part of the Regional Transportation Improvement Project and the Regional Development Impact Fee for the development project.

Reimbursement shall be from Regional Development Impact Fee revenues only, and the right to reimbursement shall be terminated 10 years from the date the applicant entered into the agreement for construction of the project.

The amount of credit, or the credit and reimbursement together, shall be in an amount equal to the cost of the Regional Transportation Improvement Project or portion thereof, as calculated by the RDIF Agency. The credit, or the credit and reimbursement together, shall be calculated at the time the applicant enters into an agreement for construction of the Regional Transportation Improvement Project. The credit shall be granted at the same time. Once calculated, the amount of reimbursement shall not increase for inflation nor shall it accrue interest.

B. Reimbursement for Projects Not Funded for Construction in the strategic plan.
If an applicant constructs all or a part of a Transportation Improvement Project that is not, at the time the applicant enters into an agreement for construction of such Project, included in the strategic expenditure plan as a Project to be funded, the developer may be eligible for reimbursement from the Treasurer of the RDIF, provided that the strategic expenditure plan is subsequently revised to include the improvement as a Project to be funded.

In such event, the amount of reimbursement shall be in an amount equal to the cost of the Transportation Improvement Project or portion thereof, as set forth in the strategic expenditure plan, and shall be calculated by the City and the Treasurer of the RDIF. The amount of the reimbursement shall be calculated when the applicant for construction of the Transportation Improvement Project and posts bonds. Once calculated, the amount of reimbursement shall not increase for inflation nor shall it accrue interest.

Reimbursement shall be from Regional Development Impact Fee revenues only, and the right to reimbursement shall be terminated 10 years from the date the applicant entered into the agreement for construction of the Project.

SECTION 7. Section 3.36.050 of the City of Carmel-by-the-Sea Municipal Code, entitled
“List of Projects on the Regional Transportation System”, shall be added to Chapter 3.36 as shown in bold, italic text as follows:

3.36.050 List of Projects on the Regional Transportation System
The Regional Development Impact Fee shall be used to fund all or a portion of the list of Transportation Improvement Projects described in Exhibit “B” of the JPA.

SECTION 8. Section 3.36.060 of the City of Carmel-by-the-Sea Municipal Code, entitled
“Administrative Costs”, shall be added to Chapter 3.36 as shown in bold, italic text as follows:
3.36.060 Administrative Costs
The City hereby establishes a processing fee or administrative surcharge to defray the reasonable cost of administration of the RDIF program by the City in an amount to be set by the Finance Director but which amount shall not to exceed 1% of the fees collected by the City in accordance with Government Code section 66014 and as otherwise provided by law.

This ordinance shall become effective on the sixty-first (61st) day following its adoption, or upon certification by the Executive Director of TAMC that the County and eight of the cities within the County have adopted by resolution or ordinance the Regional Development Impact Fee, whichever date is later. If the certification by the Executive Director of TAMC does not occur on or before December 31, 2008, this ordinance shall be void and have no force or effect.

PASSED AND ADOPTED BY THE COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this _____ day of _________ 2008, by the following vote:

AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:

APPROVED:

Heidi Burch, City Clerk

ATTEST:

SUE MCCLOUD, MAYOR