1 STAFF REPORT
DATE: December 17, 2024
TO: Justin Hess, City Manager
FROM: Patrick Prescott, Community Development Director VIA: David Kriske, Assistant Community Development Director – Transportation
BY: Nick Burant, Administrative Analyst II
SUBJECT: Review of Development Impact Fee Funds as of June 30, 2024
RECOMMENDATION
Note and file.
BACKGROUND
The purpose of this report is to provide the State- required annual summary of revenues and expenditures of the City’s Development Impact Fee (DIF) funds. Under the California Mitigation Fee Act (Assembly Bill (AB) 1600), cities and counties have the authority to implement DIFs which allows cities and counties to collect funds from new development projects to cover public infrastructure, facilities, improvements, service, and community amenity costs related to the new development’s proportionate share of impact on those facilities. DIFs are prohibited from funding operation and maintenance and cannot be collected or used to cover existing capital or infrastructure deficiencies.
The City of Burbank currently imposes DIFs on all new residential and nonresidential development to fund transportation projects and certain community facilities (including Parks and Recreation, Police, Library, Fire, and Information Technology) that are needed to offset impacts caused by new development. The City collects DIFs at the time building permits are issued. These funds are held in a DIF fund to be used to construct the necessary improvements in the future. The currently adopted DIFs are listed in the Fiscal Year (FY) 202 3-24 DIF Fee Schedule (Attachment 1), and the list of project categories that are eligible for DIF funding are listed below in Table 1.
COMMUNITY
DEVELOPMENT
2 Table 1: DIF Categories
Category Improvements
Police • Police Department capital facilities and equipment Fire • Fire Department capital facilities and equipment (e.g., vehicles)
Library • Library capital facilities and improvements
Parks and Recreation • Park and recreation facility improvements Transportation • Additions and improvements to the City’s transportation infrastructure to accommodate future
traffic volumes, including infrastructure supporting
vehicle, transit, pedestrian, and bicycle modes
Information Technology • Information Technology infrastructure and systems
Since the implementation of the City’s DIF program, expenditures have been contributed to the funding of various important capital projects, including:
• Joslyn Adult Center Computer Lab;
• Ovrom Park facilities;
• Central Library Childrens’ and Teens’ Areas;
• Buena Vista Library improvements;
• Library operating equipment;
• Police and Fire Headquarters building;
• Intersection Improvements;
• Interstate-5 / Empire Interchange;
• Burbank Channel Bikeway
• McCambridge Ballfield Light Modernization;
• Brace Canyon Park Ballfield; and
• Olive Recreation Center Re-Design
The City’s DIF program has been instrumental in ensuring that the City’s transportation system and community facilities grow in concert with the new development that impacts these facilities. In addition, for several of the projects (particularly transportation projects), DIF provided local funding leverage to help the City secure much larger grants and other funding assistance for projects. It should be noted that certain categories of infrastructure improvements, like water, sewer, storm drain, and electr ical system improvements, are not funded by DIFs but instead through other user fees and funding programs.
With the update of the Burbank2035 General Plan, Citywide Complete Our Streets Plan, and the City’s recent housing policies, Council approved an updated DIF program on June 21, 2022, which increased fee levels, added an additional fee category for Informat ion Technology, and expanded the transportation fees to housing development projects. The updated DIF program was designed to continue to ensure that new development pays its 3 fair share of the new facilities and infrastructure necessary to accommodate impacts resulting from that new development. The updated DIF program also created a tiered system to incentivize affordable housing production. The tiered system helps set the appropriate DIF levels that strike the balance between requiring new development to contribute toward their impacts on needed infrastructure while at the same time supporting other City goals required to build and protect neighborhoods. Staff expects to revisit and update the City’s DIF fee structure after the completion of the Downtown Transit Oriented Development Specific Plan, the Media District Specific Plan, the Golden State Specific Plan, and the Rancho Neighborhood Specific Plan. New growth forecasts created by those specific plans will be accounted for in that DIF fee structure update.
DISCUSSION
State law requires that the City periodically provide reports to support the ongoing implementation of the current fee program. These requirements include an annual report of receipts, expenditures, and status of DIF funds.
Under AB 1600, Government Code § 66006 requires the City to produce an annual report on the status of each development impact fee account or fund. This report, ( Attachment 1), includes the following information:
1. A brief description of the type of fee in the account/fund.
2. The amount of the fee.
3. Beginning and ending balance of the account/fund.
4. Amount of fees collected and interest earned.
5. Identification of each public improvement for which fees were spent, the total public expenditures for each improvement, and the percentage of the expenditures that were paid for with development impact fees.
6. An approximate date by which construction of public improvements will commence if the City has determined that sufficient funds have been collected to complete the financing on an incomplete public improvement.
7. Construction status of public improvements identified in previous reports where the City previously determined that sufficient funds have been collected to complete the improvement.
8. Any interfund transfers or loans made from the account/fund.
9. Amount of refunds or re-allocations of development impact fees made pursuant to Government Code 66001, and if applicable, the number of persons or entities identified to receive those funds.
Funds collected through the DIF program are deposited into separate accounts and tracked for each facility type or use (Police, Fire, Parks, Libraries, Information Technology, Transportation, and Administration). Table 2 provides a summary of the beginning balance of each fund category, the amount of fees collected, and interest 4 earned for FY 2023-24 covered by this annual report. Additionally, the summary shows the ending fund balances available in each category that are not earmarked towards specific projects or uses. As of June 2024, the DIF accounts had a total cash balance of approximately $25.1 million. However, about 40% of this cash balance is tied to projects in progress or planned through the five- year Capital Improvement Program (CIP) approved by Council as part of the City budget, including those listed in Table 4.
Considering pending payments and anticipated grant reimbursements, the total ending balance in FY 2023-24 was $15.1 million. At this time, all fees being collected pursuant to the DIF Program have been earmarked for current or future capital projects necessary to maintain the current levels of service to serve new development.
Table 2: FY 2023-24 DIF Beginning Balances, Revenues, and Ending Balances
Transportation CDD
Admin Fire Police IT Library Parks Total
Beginning
Balance $15,195,666 $42,344 $47,909 $746,115 $33,969 $1,229,713 $2,676,914 $20,272,630 DIF Collected $597,537 $168,072 $224,750 $239,450 $25,697 $752,038 $1,638,378 $3,645,922 Interest
Collected $817,388 $10,754 $9,057 $27,967 $ 1,362 $53,432 $113,585 $1,033,545 Rental Revenue $ - $14,933 $ - $ - $ - $ - $ - $14,933
Market-Value
Adjustment $2,651,757 $629 $ - $ - $ - $ - $ - $2,652,386 Expenditures $4,843,351 $ - $3,500 $27,035 $ - $21,400 $771,337 $5,666,623 AP and AR
Adjustments $3,175,582 $ - $ - $ - $ - $ - $ - $-
Cash Balance $17,594,579 $436,733 $378,216 $986,496 $61,028 $2,013,783 $3,657,540 $25,128,375 Funds
Encumbered to
Projects
$(14,170,263) $ - $(46,000) $(804,355) $ - $(121,623) $(2,624,830) $(17,767,072) Pending
Payments $5,631,767 $8,476 $(2,053) $(5,401) $(311) $(10,864) $(20,604) $5,601,010 Pending
Revenue/Grant
Reimbursements
$(3,520,207) $ - $- $ - $ - $ - $ - $(3,520,207)
Ending Balance $10,379,227 $445,209 $333,663 $203,776 $60,717 $1,902,695 $1,783,443 $15,108,730
In FY 2023-24, each department used DIF to fund infrastructure and facility improvements needed to accommodate growth and maintain public service standards. Table 3 lists only the projects that spent DIF funds in FY 2023-24 and each project’s total expenditures to- date (including the percentage of the project expenditures paid with DIFs). Those projects partially budgeted with DIF funds were supported by additional sources, including City and grant funds. During FY 2023-24, no interfund transfers or loans were made from the 5 DIF accounts and no DIF refunds or re- allocations were made pursuant to Government Code 66001.
Table 3: Public Improvement Projects with FY 2023-24 DIF Expenditures Project Total Project
Expenditures as
of June 2024
DIF %
San Fernando Connector/Empire1 $6,361,538.91 75%
San Fernando Bikeway $1,517,831.91 96%
Interstate-5 Mitigation Empire Interchange2 $407,798.25 100% Chandler Bikeway Extension $5,670.00 18%
First Street Bike Lane $150,000.00 33%
Rancho Providencia NPP $137,078.73 100%
LA River Bridge2 $87,414.30 100%
Bus Replacement2 $1,800,000.00 100%
CNG Bus Grant2 $1,587,547.50 100%
Fire Station 11 Kitchen Modern FAC $3,500.00 100%
Jail Door Access Control $27,035.01 53%
George Izay Park Master Plan $155,077.20 84%
McCambridge Picnic Improvement $153,927.00 77%
Library Pre-Processing of Materials $54,882.59 100%
Ballfield Light Modernization McCambridge Park $585,890.00 89%
Of the FY 202 3-24 CIP projects fully or partially budgeted with DIF funds, Table 4 identifies those completely financed projects that do not anticipate requiring additional DIFs and provides each project’s approximate construction start dates.
Table 4: FY 2023-24 CIP Projects and Approximate Construction Start Dates Project Approximate Construction Date
San Fernando Connector/Empire1 FY 2014-15
San Fernando Bikeway FY 2023-24
Interstate-5 Mitigation Empire Interchange2 FY 2014-15
LA River Bridge2 Project On Hold
Chandler Bikeway Extension FY 2026-27
First Street Bike Lane FY 2024-25
Rancho Providencia NPP Not Applicable
Jail Door Access Control FY 2023-24
George Izay Park Master Plan Not Applicable
Ballfield Light Modernization McCambridge Park FY 2023-24 McCambridge Picnic Improvement FY 2023-24
Fire Station 11 Kitchen Modern FAC FY 2023-24
1 This project is the local contribution to the $355 million Interstate-5 North/Empire Interchange Project. A portion of the DIF funding is reimbursed by Caltrans.
2 These projects are partially or fully grant-funded and fronted with DIF funds. The DIF-Funded % will be fully reimbursed by the grant less local match, if applicable.
6 Table 5 lists public improvements identified in previous Annual Reports as being sufficiently funded and provides an update on whether construction began on the approximate date noted in the previous report, and if not, the reason for the delay and a revised approximate construction commencement date.
Table 5: Construction Status of Previously Reported CIP Projects Project Previous
Construction
Start Date
Delay & Reason
(Yes/No)
Revised
Approximate
Construction
Date
San Fernando
Connector/Empire
Interchange
FY 2014-15 No
San Fernando Bikeway FY 2023-24 No
Interstate-5 Mitigation
Empire/Buena Vista
FY 2014-15 No
Interstate-5 Mitigation
Empire Interchange
FY 2014-15 No
LA River Bridge Project on Hold. No Project on Hold.
Chandler Bikeway
Extension
FY 2024-25 Yes. Extended
time to procure
design services.
FY 2026-27
First Street Bike Lane FY 2023-24 Yes. Design
phase was
extended to
include more in-
depth signal
work.
FY 2024-25
Brace Canyon Park Ballfield
Improvements
FY 2022-23 Yes. Project still
in design phase.
FY 2025-26
Olive Recreation Center Re-
Design
FY 2027-28 No delay, but
this project does
not include a
construction
element.
Project was
renamed to
George Izay
Park Master
Plan.
First Street Village Sound
Wall
FY 2023-24 Project
determined
infeasible.
None. Project
will be removed
from CIP list.
Picnic Facility
Improvements Verdugo
FY 2022-23 No
Ballfield Light Modernization
McCambridge
FY 2022-23 No
State law and the Burbank Municipal Code require the information presented above be made publicly available at least 15 days prior to the regular Council meeting at which the 7 item will be reviewed. A memorandum (Attachment 1) containing the required information pursuant to Government Code § 66006 was available for public review at the City Clerk’s Office and on the City’s website on December 2, 2024.
The City has continued to collect and program DIFs to fund important transportation and community facilities improvements needed to address new growth. Staff recommends Council receive this annual report in compliance with State codes governing impact fees.
ENVIRONMENTAL REVIEW
This staff report has no potential for resulting in a direct or reasonably foreseeable indirect physical change to the environment and falls outside the definition of a “project” under the California Environmental Quality Act (CEQA) and is therefore not subject to CEQA pursuant to § 15378 of Title 14 of the California Code of Regulations. This staff report is for informational purposes only regarding annual accounting of the City’s DIF funds.
Capital projects funded with DIFs will be preceded by required environmental analysis for that project pursuant to CEQA.
FISCAL IMPACT
Receiving the information contained in this report has no fiscal impact, as impact fee revenues and expenditures have already been approved as part of the City’s budget.
Reporting of this information satisfies the regulatory requirements for the City to continue to impose DIFs on new development.
CONCLUSION
The City’s DIF program has helped fund important City infrastructure to accommodate growth from new development, which ultimately supports the Council’s efforts to build better neighborhoods that can integrate new development while preserving the City’s existing character. The information contained in this report demonstrates the City’s current use of DIF funds and the continued need for impact fee funding per the requirements of the Mitigation Fee Act.
ATTACHMENT
Attachment 1 – FY 2023-24 DIF Program Annual Report – Review of DIF Funds Memorandum for Public Review, posted December 2, 2024