CITY COUNCIL: Resolution to Increase Construction Activity Road Impact Fee from 0.75% to 1% of Project Valuation of Building Permit

Meeting Date: 12 July 2011
Prepared by: Sean Conroy, Plng & Bldg Services Manager

City Council
Agenda Item Summary

Name: Consideration of a Resolution to increase the Construction Activity Road Impact Fee from 0.75% to 1% of the project valuation of a building permit.

Description: The Construction Activity Road Impact Fee is collected on each building permit application that is approved by the City. The fee is currently 0.75% of the construction value of the project. This Resolution would raise the fee to 1% of the construction value of the project.

Overall Cost:
City Funds: N/A
Grant Funds: N/A

Staff Recommendation: Adopt the Resolution.

Important Considerations: It is recognized that construction vehicles have a significant impact on the roads and infrastructure of the City. The Construction Activity Road Impact Fee was originally adopted in 2009 and was designed to generate additional funds for road repairs and maintenance.

Decision Record: The Construction Activity Road Impact Fee was originally adopted on October 6, 2009.

Reviewed by:

______________________________ _____________________
John Goss, Interim City Administrator Date

CITY OF CARMEL-BY-THE-SEA
DEPARTMENT OF COMMUNITY PLANNING AND BUILDING
STAFF REPORT
TO: MAYOR MCCLOUD AND COUNCIL MEMBERS
THROUGH: JOHN GOSS, INTERIM CITY ADMINISTRATOR
FROM: SEAN CONROY, PLNG & BLDG SERVICES MANAGER
DATE: JULY 12, 2011
SUBJECT: CONSIDERATION OF A RESOLUTION TO INCREASE THE CONSTRUCTION ACTIVITY ROAD IMPACT FEE FROM 0.75% TO 1% OF THE PROJECT VALUATION OF A BUILDING PERMIT

BACKGROUND AND PROJECT DESCRIPTION
In 2008, based on a report prepared by Nichols Consulting Engineers (NCE) regarding the condition of the City’s streets the City Council began discussing the possibility of a construction activity road impact fee. The Council held two public workshops before ultimately deciding to adopt the fee at 0.75% of the construction value of projects requiring a building permit.

During recent budget workshops the Council has expressed an interest in raising the construction activity road impact fee. The attached resolution would raise the fee from 0.75% to 1%.

EVALUATION
Road Conditions: The NCE report suggested that the City’s roads would require approximately $600,000 of maintenance and improvements on an annual basis. Under current economic conditions, it is not feasible to fund road maintenance activities at that level. Using the NCE report as a basis, the City Engineer and the Superintendent of Public Works routinely identify projects that should be considered priorities for funding.

While an increase in revenue from the road impact fee would not allow for full funding as recommended in the NCE report, it would allow the City to perform more of the road maintenance project priorities as identified by the City Engineer and Superintendent of Public Works. For example, projects 7-9 from Supplemental Budget Message #9 could be added to the 2011-12 Capital Budget.

Fiscal Impacts: During fiscal year 2010/11, the City received approximately $100,000 in revenue from the road impact fee. For fiscal year 2011/12, the projected road impact fee based on 0.75% is $120,000. If the fee was raised to 1%, the projected revenue would be approximately $160,000.

RECOMMENDATION
Adopt the attached Resolution.

CITY OF CARMEL-BY-THE-SEA
CITY COUNCIL
RESOLUTION 2011-
CONSIDERATION OF A RESOLUTION OF THE CITY COUNCIL OF CARMEL-BY-THE-SEA TO INCREASE THE CONSTRUCTION ACTIVITY ROAD IMPACT FEE FROM 0.75% TO 1% OF THE PROJECT VALUATION OF A BUILDING PERMIT

WHEREAS, the City Council adopted a construction activity road impact fee of 0.75% of the project valuation of a building permit on 6 October 2009; and

WHEREAS, the Council has recognized the impact that construction vehicles have on City streets; and

WHEREAS, the Council has determined that the road impact fee is necessary to assist in the long term maintenance of City streets as described in the 2007 Pavement Management Study by Nichols Consulting Engineers; and

WHEREAS, an increase from 0.75% to 1% will more effectively assist the City in improving and maintaining its streets.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA does hereby resolve to:

1. Increase the Construction Activity Road Impact Fee on the Community
Planning and Building Fee Schedule from 0.75% to 1% of the project
valuation of a building effective August 1, 2011.

2. Continue to deposit these fees in a special fund designated for road
maintenance.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 12th day of July 2011 by the following roll call vote:

AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:

SIGNED,

________________________
SUE McCLOUD, MAYOR

ATTEST:

_________________________________
Heidi Burch, City Clerk