1 DEVELOPMENT IMPACT FEE PROGRAM CITY COUNCIL STUDY SESSIONJune 28, 2023
2 AGENDA•Project Team•Development Impact Fees Overview•AB 602•Nexus Study Updates and History •Proposed Development Impact Fees•Fee Comparisons•Policy Decisions •Fee Program Timeline•Questions
3 PROJECT TEAMMegan QuinnDirector, Municipal + District Finance Adam MarstonProject Manager, Municipal + District Finance
4 Development Impact Fees (DIFs) are fees imposed by a local government on new development projects to ensure public services and infrastructure will be sufficient to serve new development. Governing law for DIFs is Assembly Bill 1600 (Mitigation Fee Act) (GC 66000)Fees are established on new development’s fair share based on a rational nexus testDIFs are a one-time fee on new development to mitigate their impactsOnly includes cost attributable to new development Fees can only fund capital costs Fees cannotfund existing deficienciesFee cannotfund ongoing maintenance or salariesFunds must be used for the projects for which they were intendedIf not spent, funds must be returned to the property owner Must meet Annual and Five-Year Reporting requirements per AB 1600
DEVELOPMENT IMPACT FEES (DIFS)OVERVIEW
5 •Why are impact fees important:New development pays for their fair share of new infrastructure without burdening existing development. Development impact fees equitably distribute the costs related to newinfrastructure to all potential new developments. Balances fee levels with desired economic growth.•Why are fees updated/adjusted?Without an update to old fees and annual adjustments to adopted development impact fees, there would not be adequate funding to support infrastructure for future growth as estimated by the City’s General Plan.Updated analyses and methodology to comply with the legal requirements of the Mitigation Fee Act (AB1600) and AB602
DEVELOPMENT IMPACT FEESCONTINUED
6 •Adopted in late 2021 (Partially enacted in January 2022; Fully in effect as of July 2022)•As part of the Nexus Study, encourages Agency to charge fees on residential land uses per square foot•Fees can be charged on a per unit basis if the Agency can make findings as to why a square footage fee is not appropriate•Nexus Study must identify the existing level of service for each public facility, identify the proposed new level of service, and include an explanation of why the new level of service is necessary•Requires that the Agency includes a Capital Improvement Program (CIP) as part of the Nexus Study•Nexus Study updated every 8 years ASSEMBLY BILL (AB) 602
7 •Updated Data: Coordinated with City staff to obtain land use information, list of proposed capital improvements for new development, existing infrastructure/facilities inventory, value of existing facilities and vehicles, and other necessary data.•Land Uses: Updated based on the General Plan.•Updated Methodology: Updated methodology based on AB602 –including review of existing level of service, residential fees per square foot, and added a capital improvement plan to the Nexus Study. •Fee Updates: Reviewed existing fees, determined proposed fees based on results of Nexus Study, and consolidated some fee categories for additional flexibility.•Coordination Meetings: Harris scheduled numerous teleconferences with various City departments to discuss the facility needs to support new development, updated costs, and fee methodology and key assumptions. City staff reviewed the draft tables and draft Nexus Study.
NEXUS STUDY UPDATES
8 •History•Government Services, Public Safety, Transportation, and Parks and Recreation Fee updated in 2009•MUP adopted in 1990•Reviewed Art in Public Places Fee•Identify Impact Fees per the Mitigation Fee Act•Cannot fund maintenance•Cannot fund salary positions•Tied to impacts caused by new developments•Fee Update ActivitiesoMet with City Staff to confirm future growth projections, facility inventory and facility valuationsoUpdated costs and reviewed methodology and assumptions HISTORY OF CATHEDRAL CITY FEESNotesCurrent FeesUndergrounding study (1990) recommended no change to current fee or change to In-Lieu FeeMaster Underground Plan (MUP)Included in Separate Fire Facilities Fee and Police FacilitiesFeeFire and Police Facilities/EquipmentIncluded in Transportation FeeTraffic SignalizationIncluded in General Government Facilities FeeCity Yard Vehicle StorageIncluded in Police Facilities FeePolice Community CenterIncluded in Police Facilities FeePublic Safety Training SiteIncluded in Separate Fire Facilities Fee and Police FacilitiesFeePublic Safety FacilitiesIncluded in Transportation FeeRoad and Traffic FacilitiesIncluded in Transportation FeeInterchange and BridgesIncluded in Transportation FeeBikeway FacilitiesIncluded in Transportation FeeTrail FacilitiesIncluded in Park Facilities FeePark and Recreation FacilitiesNo Change – not an AB1600 FeeTransit DevelopmentNo change – not an AB1600 FeeArt in Public Places 9 •Residential fees per square foot in order to comply with AB602•Level of Service, Facility Standards, and Planned Facilities Methodology Updates312CHANGES TO THE FEE PROGRAMFee consolidation for additional flexibility and ease of administration:•Transportation•Fire•Police•General Government Fee 10 PARK FACILITIES FEEFACILITY STANDARD METHODDescription ValueFuture FacilitiesFuture Park Improvements 191,542,500$ Subtotal Park Improvements 1191,542,500$ Future Service Population85,130 Total Existing Level of Service per Capita 2,250$ Notes: 1 Cost per Acre of Park Improvements provided by the City of Cathedral City on August 18, 2022.Source: City of Cathedral City General Plan.•Based on General Plan Standard of 3 acres per 1,000•Park improvement cost per acre provided by City References: 19/149 11 PARK FACILITIES FEEPROPOSED FEELand UseCost Per Capita DensitySubtotal Fee(per unit)Administration Fee(per unit)Total Fee(per unit)Average Unit Size (SF) Fee/SFResidential Single Family 2,250$ 2.85 6,412.50$ 320.63$ 6,733.13$ 2,000 3.37$ Multi Family 2,250$ 2.51 5,647.50$ 282.38$ 5,929.88$ 1,250 4.74$ Notes: 1Source: City of Cathedral City Comprehensive General Plan.An administrative fee of 5% is included in the fees show n for (1) legal, accounting, and other administrative support and (2) development impact fee program administration costs including revenue collection, revenue and cost accounting, mandated public reporting, and fee justification analysis.References: 20/150 12 TRANSPORTATION FEEPLANNED FACILITIES METHODDescription ValueStreet Improvements / Traffic Signals1Street Improvements 75,223,090.90$ Traffic Signals 15,000,000.00$ Subtotal Street Improvements / Traffic Signals 90,223,090.90$ Mobility Improvements 2,3Class I 17,610,912.00$ Class 2 1,318,680.00$ Off Road Shared NEV/Bike 313,632.00$ Subtotal Mobility Facilities 19,243,224.00$ TripsExisting Trips 265,832 Future Additional Trips 582,607 Subtotal Trips 848,439 Trip AllocationExisting Trips 31%Future Additional Trips 69%Subtotal Trips 100%Transportation Improvements Cost AllocationExisting Development Responsibility 34,297,853.37$ Future Development Responsibility 75,168,461.53$ Subtotal Improvement Costs 109,466,314.90$ Total Transportation Fee per Future Trip 129.02$ Notes: 1 Future street improvements and traffic signal facilities developed by the City of Cathedral City Engineering Department.2 Future bikew ays & multi-modal facilities derived from the City of Cathedral City Comprehensive General Plan dated July 1, 2019.3 Cost estimates per mile provided by the City of Cathedral City on August 18, 2022. Source: City of Cathedral City Comprehensive General Plan and Cathedral City Active Transportation Plan and City of Cathedral City.•Planned Facilities Method•Merge Transportation Fees for ease of administration •Identify Cost per Trip using Institute of Transportation Engineers trip generation assumptions for each land useReferences: 24/154 13 TRANSPORTATION FACILITIES FEEPROPOSED FEELand Use Cost per Trip TripsEmployees per 1,000 SFImprovement FeeAdministration Fee Total FeeAverage Unit Size (SF) Fee/SFResidential (per Unit)(per Unit)(per Unit)Single Family 129.02$ 9.43 - 1,216.67$ 60.83$ 1,277.50$ 2,000 0.64$ Multi Family 129.02$ 5.64 - 727.68$ 36.38$ 764.06$ 1,250 0.61$ Non-Residential(per 1,000 SF)(per 1,000 SF)(per 1,000 SF)Commercial 129.02$ 8.71 1.82 2,045.26$ 102.26$ 2,147.52$ Office 129.02$ 3.33 4.00 1,718.56$ 85.93$ 1,804.49$ Industrial 129.02$ 5.05 0.40 260.62$ 13.03$ 273.65$ Notes: 1An administrative fee of 5% is included in the fees show n for (1) legal, accounting, and other administrative support and (2) development impact fee program administration costs including revenue collection, revenue and cost accounting, mandated public reporting, and fee justification analysis.Source: Institute of Transportation Engineer's 11th Edition.References: 28/158 14 GENERAL GOVERNMENT FACILITIES FEEEXISTING LEVEL OF SERVICE Description ValueExisting Facilities 1General Government Facilities 45,253,966$ Vehicles & Equipment 1,067,022$ Subtotal General Government Facilities46,320,988$ Existing Service Population 255,933 Total Existing Level of Service per Resident 828.15$ Total Existing Level of Service per Worker 306.42$ Notes: 12Source: City of Cathedral City Statement of Values and Listing of Vehicles & Art. Existing Facilities values derived from the Cathedral City "Statement of Values" and "Listing of Vehicle & Art" provided by Cathedral City Staff on May 11, 2022. Existing Service population comprises of the 51,840 Residents and 9,934 Workers (w orkers w eighted at 0.37 based on a 45 hour w ork w eek).References: 32/162 15 GENERAL GOVERNMENT FACILITIES FEEPROPOSED FEELand UseCost Per Resident / Worker DensitySubtotal FeeAdministration Fee Total FeeAverage Unit Size (SF) Fee/SFResidential (per Unit)(per Unit)(per Unit)Single Family 828.15$ 2.85 2,360.23$ 118.01$ 2,478.24$ 2,000 1.24$ Multi Family 828.15$ 2.51 2,078.66$ 103.93$ 2,182.59$ 1,250 1.75$ Non-Residential 2(per 1,000 SF)(per 1,000 SF)(per 1,000 SF)Commercial 306.42$ 1.82 557.68$ 27.88$ 585.56$ Office 306.42$ 4.00 1,225.66$ 61.28$ 1,286.94$ Industrial 306.42$ 0.40 122.57$ 6.13$ 128.70$ Notes: 12Non-residential density based upon USGBC LEED BD+C: New Construction | v4 - Default Occupancy Counts.An administrative fee of 5% is included in the fees show n for (1) legal, accounting, and other administrative support and (2) development impact fee program administration costs including revenue collection, revenue and cost accounting, mandated public reporting, and fee justification References: 34/164 16 FIRE FEEEXISTING LEVEL OF SERVICE
Description ValueExisting FacilitiesFire Facilities1 19,533,159.00$ Vehicles & Equipment25,950,719.47$ Subtotal Fire Facilities 25,483,878.47$ Existing Service Population355,933 Total Existing Level of Service per Resident 455.61$ Total Existing Level of Service per Worker 168.58$ Notes: 1 Building values derived from the Cathedral City Statement of Values dated March 29, 2022 provided by Cathedral City Staff on May 11, 2022. 2 Vehicle & equipment values derived from the Cathedral City Listing of Vehicles & Art provided by Cathedral City Staff on May 11, 2022. 3Source: City of Cathedral City Statement of Values and Listing of Vehicles & Art. Existing Service population comprises of the 51,840 Residents and 9,934 Workers (w orkers w eighted at 0.37 based on a 45 hour w ork w eek).References: 39/169 17 FIRE FACILITIES FEEPROPOSED FEELand UseCost Per Resident / Worker DensitySubtotal FeeAdministration FeeTotal FeeAverage Unit Size (SF) Fee/SFResidential (per Unit)(per Unit)(per Unit)Single Family 455.61$ 2.85 1,298.49$ 64.92$ 1,363.41$ 2,000 0.68$ Multi Family 455.61$ 2.51 1,143.58$ 57.18$ 1,200.76$ 1,250 0.96$ Non-Residential 2(per 1,000 SF)(per 1,000 SF)(per 1,000 SF)Commercial 168.58$ 1.82 306.82$ 15.34$ 322.16$ Office 168.58$ 4.00 674.32$ 33.72$ 708.04$ Industrial 168.58$ 0.40 67.43$ 3.37$ 70.80$ Notes: 12Source: City of Cathedral City Statement of Values and Listing of Vehicles & Art. An administrative fee of 5% is included in the fees show n for (1) legal, accounting, and other administrative support and (2) development impact fee program administration costs including revenue collection, revenue and cost accounting, mandated public reporting, and fee justification analysis.Workers are w eighted at 0.37 based on a 45 hour w ork w eek relative to a resident's time of 123 hours (168 hours per w eek less 45 w ork hours).References: 40/170 18 POLICE FEEEXISTING LEVEL OF SERVICE
Description ValueExisting FacilitiesPolice Facilities1 13,740,020.72$ Vehicles & Equipment23,618,253.13$ Subtotal Police Facilities 17,358,273.85$ Existing Service Population355,933 Total Existing Level of Service per Resident 310.34$ Total Existing Level of Service per Worker 114.83$ Notes: 1 Building values derived from the Cathedral City Statement of Values dated March 29, 2022 provided by Cathedral City Staff on May 11, 2022. 2 Vehicle & equipment values derived from the Cathedral City Listing of Vehicles & Art provided by Cathedral City Staff on May 11, 2022. 3Source: City of Cathedral City Statement of Values and Listing of Vehicles & Art. Existing Service population comprises of the 51,840 Residents and 9,934 Workers (w orkers w eighted at 0.37 based on a 45 hour w ork w eek).References: 45/175 19 POLICE FACILITIES FEEPROPOSED FEELand UseCost Per Resident / Worker Density Subtotal FeeAdministration Fee1Total FeeAverage Unit Size (SF) Fee/SFResidential (per Unit)(per Unit)(per Unit)Single Family 310.34$ 2.85 884.46$ 44.22$ 928.68$ 2,000 0.46$ Multi Family 310.34$ 2.51 778.95$ 38.95$ 817.90$ 1,250 0.65$ Non-Residential 2(per 1,000 SF)(per 1,000 SF)(per 1,000 SF)Commercial 114.83$ 1.82 208.98$ 10.45$ 219.43$ Office 114.83$ 4.00 459.30$ 22.97$ 482.27$ Industrial 114.83$ 0.40 45.93$ 2.30$ 48.23$ Notes: 12Source: City of Cathedral City Statement of Values and Listing of Vehicles & Art. An administrative fee of 5% is included in the fees show n for (1) legal, accounting, and other administrative support and (2) development impact fee program administration costs including revenue collection, revenue and cost accounting, mandated public reporting, and fee justification analysis.Workers are w eighted at 0.37 based on a 45 hour w ork w eek relative to a resident's time of 123 hours (168 hours per w eek less 45 w ork hours).References: 46/176 20 PROPOSED FEE COMPARISON TO EXISTING (SOUTH OF I-10) -RESIDENTIAL (PER SQUARE FOOT) Single-Family Unit 1,782 SF plus 518 SF Garage Total Fee per Unit (example project)Existing1Proposed% Change between Proposed and Existing$2,300 $11,396 395%1) Existing park fee is $0 for this project. Multi-Family Apartment 8 Total Units (7,584 SF)Total Fees (example project)Existing1Proposed% Change between Proposed and Existing$16,450 $66,103 302%1) Existing park fee is $0 for this project. 21 PROPOSED FEE COMPARISON TO EXISTING (SOUTH OF I-10) -NON-RESIDENTIAL (PER 1,000 SQUARE FEET) Park Fee excluded in chart comparison.
Retail/Restaurant 2,800 SF with 500 SF Patio Total Fee per Unit (example project)Existing1Proposed% Change between Proposed and Existing$1,423 $9,169 544% 22 CoachellaRancho MirageDesert Hot SpringsIndioCathedral CityYYYYYTransportation/Roads/Traffic/CirculationYYYYYParks & RecreationYYYYYGovt Facilities/Public BuildingsYYYYPoliceYYYYYFireYYStorm DrainageYGeneral FacilitiesYTraffic SignalsYAquatic CenterYLibraryYLow Income Housing MitigationYBus ConnectionYSewer ConnectionYWater Connection DIFS CHARGED BY CITYCOMPARISONFee comparison excludes sewer and water connection fees 23 $0$1$2$3$4$5$6$7$8$9$10$11Cathedral City Indio Desert Hot Springs Rancho Mirage CoachellaSingle Family Multi Family
Condominium/Mobile HomeNEIGHBORING CITY COMPARISON TO PROPOSED FEERESIDENTIAL (FEE PER SQUARE FOOT) 24 $6.39 $6.81 $6.69 $4.88 $9.98 $0$1$2$3$4$5$6$7$8$9$10Cathedral City Indio Desert Hot Springs Rancho Mirage CoachellaCathedral CityIndioDesert Hot SpringsRancho MirageCoachellaAverage: $6.95NEIGHBORING CITY COMPARISONRESIDENTIAL (SINGLE FAMIL Y – PER SQUARE FOOT) 25 $8.72 $9.32 $8.14 $5.05 $11.22 $0$1$2$3$4$5$6$7$8$9$10$11$12Cathedral City Indio Desert Hot Springs Rancho Mirage CoachellaCathedral CityIndioDesert Hot SpringsRancho MirageCoachellaAverage: $8.49NEIGHBORING CITY COMPARISONRESIDENTIAL (MULTI FAMIL Y – PER SQUARE FOOT) 26 $0$2$4$6$8$10$12$14$16Cathedral City Indio Desert Hot Springs Rancho Mirage CoachellaOffice Commercial
IndustrialNEIGHBORING CITY COMPARISON TO PROPOSED FEENON-RESIDENTIAL (FEE PER SF) 27 $4.28 $7.34 $9.59 $3.75 $6.33 $0$1$2$3$4$5$6$7$8$9$10Cathedral City Indio Desert Hot Springs Rancho Mirage CoachellaCathedral CityIndioDesert Hot SpringsRancho MirageCoachellaAverage: $6.26NEIGHBORING CITY COMPARISONOFFICE (PER SF) 28 $3.27 $16.23 $9.59 $8.68 $5.29 $0$2$4$6$8$10$12$14$16$18Cathedral City Indio Desert Hot Springs Rancho Mirage CoachellaCathedral CityIndioDesert Hot SpringsRancho MirageCoachellaAverage: $8.61NEIGHBORING CITY COMPARISONCOMMERCIAL (PER SF) 29 $0.52 $3.34 $4.87 $1.77 $4.05 $0$1$1$2$2$3$3$4$4$5$5Cathedral City Indio Desert Hot Springs Rancho Mirage CoachellaCathedral CityIndioDesert Hot SpringsRancho MirageCoachellaAverage: $2.91NEIGHBORING CITY COMPARISONINDUSTRIAL (PER SF) 30 DEVELOPMENT IMPACT FEE PROGRAM POLICY CONSIDERATIONS Adopt Maximum Justifiable Fee Adopt Maximum Fee with a Phased in Approach50% Year 1, 75% Year 2, Full Fee Year 31/3 Year 1, 2/3 Year 2, Full Fee Year 3Other options Note that if lower fee is collected, full amount to fund infrastructure and facilities may not be collected General fund contributions and grants may be used to make up difference 31 OCTOBER 2023AUGUST 2023JUNE 2023•Fees go into effect 60 days after adoptionDEVELOPMENT IMPACT FEE PROGRAM FEE ADOPTION SCHEDULE •City Council Study Session•Public Hearing•Fees adopted 32 E-mail: [email protected]: 916.306.5704 DEVELOPMENT IMPACT FEE PROGRAM THANK YOU QUESTIONS?