Agenda packet — Covina City Council, March 19, 2024 (part 5 of 5)

City of Covina Page 6-2
Development Impact Fee Study
July 7, 2023
In this chapter, the existing level of service for general government facilities is based on the relationship between the City’s existing service population and the replacement cost of existing facilities. Table 6.1 lists the City’s existing general government facilities. The impact fee cost basis for each building in Table 6.1 is the sum of the building replacement cost, the site value and the replacement cost of furniture, fixtures and equipment (FF&E).

Table 6.2 Table on the next page is a list of existing general government vehicles and equipment with their replacement costs. Replacement cost is used in this study as an indication of the cost of additional facilities and equipment that will be needed to serve future development.

Table 6.1: Existing General Government Facilities
Constr Building Bldg Repl Site Site FF&E Repl Impact Fee Facility Date Sq Ft 1
Cost 2 Acres 3Value 4Cost 5 Cost Basis 6
City Hall 1990 25,625 6,791,644$ 0.88 1,012,000$ 2,458,268$ 10,261,912$ City Yard Site 4.70 5,405,000$ 5,405,000$
City Yard Building A 1952 3,552 550,785$ 119,848$ 670,633$ City Yard Building B 1952 15,194 1,975,023$ 24,684$ 1,999,707$ City Yard Building C 1970 7,440 893,150$ 225,789$ 1,118,939$ City Yard Building D 1970 5,460 690,989$ 181,250$ 872,239$ City Fuel Stations 1970 1,851 1,100,000$ 1,100,000$
Civic Ctr Pkg Structure 2008 31,128 2,676,573$ 0.43 494,500$ 3,171,073$ Facilities share of General Government Impact Fee Fund Balance 207,556$ Total 24,807,059$
1 Existing buildings square feet from the City's insured property schedule; facilities share of General Government impact fee fund balance based on facilities percentage of total facilities and equipment cost 2 Building replacement cost from the City's insured property schedule or the Covina Public Works Dept. 3 Site acres provided by the Covina City Engineer or estimated by NBS 4 Site value based on $1,150,000 per acre
5 Replacement cost of furniture, fixtures and equipment (FF&E) based on the personal property cost from the City's insured property schedule
6 Impact fee cost basis = building replacement cost + furniture, fixtures and equipment replacement cost; impact fee fund balance provided by the City of Covina Finance Department

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City of Covina Page 6-3
Development Impact Fee Study
July 7, 2023

6.3 calculates the City’s existing level of service as a cost per capita for general government facilities. The cost per capita is based on the City’s existing service population and the cost of existing facilities, vehicles and equipment from Tables 6.1 and 6.2.

Table 6.2: Existing General Government Vehicles and Equipment Description
Model
Year Department
Replacement
Cost 1
2020 Mitsubishi Outlander PHEV 2020 PW Admin. 48,000$
2020 Mitsubishi Outlander PHEV 2020 PW Admin. 48,000$
2017 Chevrolet Bolt EV 2017 PW Admin. 45,000$
2020 Nissan Leaf 2020 Env. Services 45,000$
2004 GMC Savana w/ 10'Box 2004 Bldg. Maint. 45,000$
2014 Ford C-Max Hybrid 2014 Bldg. Maint. 29,000$
Ford E-150 VAN 1999 Bldg. Maint. 45,000$
Ford F550 4X2 Crew Cab Dump Truck 2020 Streets 97,500$
Fabrique Par/Nat'l Signal Arrowboard Trailer 2019 Streets 8,500$ Wacker Riding Roller RD880V 1997 Streets 19,500$
Wacker Tilt Trailer T4000 1997 Streets 8,500$
Allmand Eclipse Light Trailer 2000 Streets 6,500$
GMC 2500HD Sierra Service Body w. Liftgate 2004 Streets 47,500$ BobCat Skid Steer S250 2006 Streets 28,500$
Chevrolet 3500HD 2007 Streets 42,500$
GMC TC7500 Reg. Cab 2009 Streets 198,500$
Case 580N Backhoe 2014 Streets 98,200$
GMC Sierra 3500 Stake Bed Dump 2014 Streets 59,500$
Ford F250 Super Duty (2) 2015 Streets 57,500$
BobCat 72" Sweeper Box 2006 Streets 10,500$
BobCat 24" Planer 2006 Streets 11,200$
BobCat 74" Combo Bucket Hydraulic 2006 Streets 8,350$
BobCat HB980 Breaker Hydraulic 2006 Streets 8,350$
BobCat 74" Construction / HD Bucket 2006 Streets 9,200 $ Bomag BW55E Walk-behind Roller 2006 Streets 19,250$
Edco CMP-8 Concrete Planer 2006 Streets 7,800$
Rayco / RG25HD-NT Stump Grinder 2008 Streets 10,900$
Wanco Message Board 2021 Streets 10,500$
Equipment share of General Government Impact Fee Fund Balance 9,060$ Total 1,082,810$
1 Replacement cost estimated by the City of Covina Public Works Department; equipment share of General Government impact fee fund balance based on equipment percentage of total facilities and equipment cost; impact fee fund balance provided by the City of Covina Finance Department

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City of Covina Page 6-4
Development Impact Fee Study
July 7, 2023
Impact Fees per Unit
Table 6.4 calculates impact fees per unit by development type for general government facilities.

Those fees are based on the per-capita costs from Table 6.3 and service population per unit factors from Table 2.1. Because the cost per capita for general government vehicles and equipment in Table 6.3 is such a small number, it is combined with the per-capita cost for general government facilities to calculate the impact fees in Table 6.4.

Table 6.3: Cost per Capita - General Gov't Facilities & Vehicles Cost
Component
Impact Fee
Cost Basis 1
Existing Service
Population 2
Cost per
Capita 3
Facilities 24,807,059$ 66,878 370.93$
Vehicles and Equipment 1,082,810$ 66,878 16.19$
Total 25,889,869$ 66,878 387.12$
1 See Tables 6.1 and 6.2
2 See Table 2.2
3 Cost per capita = impact fee cost basis / existing population Table 6.4: General Government Facilities Impact Fees per Unit Development
Type Units 1
Cost per
Capita 2
Service Pop
per Unit 3
Impact Fee
per Unit 4
Residential: <600 Sq. Ft. DU $387.12 1.00 387.12$
Residential: 600-800 Sq. Ft. DU $387.12 1.35 522.61$
Residential: >800-1,200 Sq. Ft. DU $387.12 2.25 871.02$ Residential: >1,200-1,900 Sq. Ft. DU $387.12 3.55 1,374.28$ Residential: >1,900-2,300 Sq. Ft. DU $387.12 4.75 1,838.82$ Residential: >2,300 Sq. Ft. DU $387.12 5.75 2,225.94$
Commercial KSF $387.12 2.22 859.41$
Office KSF $387.12 1.62 627.14$
Industrial KSF $387.12 0.59 228.40$
Public/Quasi-Public Facilities KSF $387.12 1.62 627.14$ 1 Units of development: DU = dwelling unit
2 See Table 6.3; the cost per capita in this table is the sum of the cost per capita numbers for general government facilities and general government vehicles and equipment
3 See Table 2.1
4 Impact per unit = cost per capita X population per dwelling unit

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City of Covina Page 6-5
Development Impact Fee Study
July 7, 2023
Projected Revenue
As noted in Chapter 2, this study includes a forecast of future residential development, but no forecast of future non-residential development. Consequently, the revenue projections in this section are based only on future residential development.

The residential impact fees per unit in Table 6.4 are based on residential unit size in square feet.

Updating the Fees
The impact fees calculated in this chapter are based on the current estimated cost of general government facilities, vehicles and equipment. We recommend that the fees be reviewed annually and adjusted as needed using local cost data or an index such as the Engineering News Record Construction Cost Index (CCI). See the Implementation Chapter for more on indexing of fees.

Nexus Summary
As discussed in Chapter 1 of this report, Section 66001 of the Mitigation Fee Act requires that an agency establishing, increasing or imposing impact fees, must make findings to:

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City of Covina Page 6-6
Development Impact Fee Study
July 7, 2023
c. The amount of the fee and the facility cost attributable to the development project.

Satisfying those requirements also ensures that the fees meet the “rational nexus” and “rough proportionality” standards enunciated in leading court decisions bearing on impact fees and other exactions. (For more detail, see “Legal Framework for Impact Fees” in Chapter 1.) The following paragraphs explain how the impact fees calculated in this chapter satisfy those requirements.

Purpose of the Fee: The purpose of the impact fees calculated in this chapter is to mitigate the impact of new development on the need for general government facilities in Covina.

Use of the Fee. Impact fees calculated in this chapter will be used to provide additional general government facilities to mitigate the impacts of new development in the City. As provided by the Mitigation Fee Act, revenue from impact fees may also be used for temporary loans from one impact fee fund or account to another.

Reasonable Relationship between the Use of the Fee and the Development Type on Which It Is Imposed. The impact fees calculated in this chapter will be used to provide additional general government facilities, vehicles and equipment to serve the needs of new development in Covina.

Reasonable Relationship between the Need for the Facilities and the Type of Development on Which the Fee Is Imposed. New development increases the need for general government facilities to maintain the existing level of service as described earlier in this chapter. Without additional general government facilities, the increase in demand associated with new development would result in a reduction in the level of service provided to all development the City.

Reasonable Relationship between the Amount of the Fee and the Facility Cost Attributable to the Development Project. The amount of the impact fees for general government facilities calculated in this chapter depends on the estimated increase in service population per unit associated with each category of development. The fees per unit of development calculated in this chapter for each type of development are based on the estimated average service population per unit for that type of development in Covina. Thus, the fee charged to a development project reflects the impact of that project on the need for general government facilities in the City.

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City of Covina Page 7-1
Development Impact Fee Study
July 7, 2023
Chapter 7. Police Department Facilities
This chapter calculates impact fees for Police Department facilities in Covina. Where the term Police facilities is used in this chapter, it should be understood to include vehicles and equipment.

Methodology
This chapter calculates impact fees using the standard-based method discussed in Chapter 1.

Standard-based fees are calculated using a specified relationship or standard that determines the number of service units to be provided for each unit of development. All of the impact fees calculated in this chapter are based on the City’s existing level of service (LOS) as defined in the section titled Existing Facilities and Existing Level of Service, below. Impact fees calculated in that manner are intended to provide the funding needed to maintain the existing level of service as the City grows.

Service Area
The impact fees calculated in this chapter are intended to apply to all new development in the City.

Demand Variable
A “demand variable” is a quantifiable attribute of development that is used in impact fee calculation formulas to represent the impact of development on a particular type of capital facilities. The demand variable used to calculate impact fees for Police facilities in this chapter is calls for service per year.

The Covina Police Department logged 36,350 calls for service in 2021. NBS took a random sample of 725 of those calls and classified them by the type of development where the call originated.

Of the 725 sampled calls, 145 could not be classified because they were not associated with a specific address. Statistically, the remaining 580 calls represent a sample large enough to reach a margin of error of 4% at a 95% confidence level.

The sampled calls were used to determine the percentage of all calls generated by various types of development. Those percentages were applied to the total number of 2021 calls to determine the number of calls associated with each type of development. Then, the number of calls for each development type was divided by the number of existing units of that type to arrive at a callsper-unit-per year factor for each type of development.

For residential development, police calls for service could not be identified for each unit-size category used in this study, so calls-per-unit-per-year factors were calculated for single-family, multi-family and mobile home unit types. The range of factors for those unit types was then used to establish a range of factors for all residential unit size categories used in this study as shown

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City of Covina Page 7-2
Development Impact Fee Study
July 7, 2023
in Table 2.1 in Chapter 2 and in Table 7.4 in this chapter. It should also be noted that calls for service to parks and schools were reallocated to residential development which creates the need for the parks and schools.

Existing Facilities and Existing Level of Service
In 2021, AB 602 added Section 66016.5 to the Mitigation Fee Act. That section requires, after January 1, 2022, that the level of service used in an impact fee study must be compared with the existing level of service. If the level used in the impact fee study exceeds the existing level of service, an explanation is required. The impact fees calculated in this chapter are based on the existing level of service as shown in Table 7.3 on page 7-4, so there is no level-of-service issue in the calculation of impact fees in this chapter with respect to Section 66016.5.

In this chapter, the existing level of service for Police facilities is based on the relationship between the current number of calls for service per year and the replacement cost of existing facilities. Table 7.1 lists the City’s existing Police buildings. The impact fee cost basis for each building in Table 7.1 is the sum of the building replacement cost, site value and the replacement cost of furniture, fixtures and equipment (FF&E).

Table 7.2 is a list of existing Police vehicles and equipment with their replacement costs.

Replacement cost is used in this study as an indication of the cost of additional facilities and equipment that will be needed to serve future development.

Table 7.1: Existing Police Department Facilities
Constr Building Bldg Repl Site Site FF&E Repl Impact Fee Facility Date Sq Ft 1
Cost 2 Acres 3Value 4Cost 5 Cost Basis 6
Police-Fire Admin Bldg 1976 18,444 4,214,678$ 1.60 1,840,000$ 4,240,612$ 10,295,290$ Police Dept Storage Bldg 1970 5,250 65,013 N/A 65,013$
Facilities share of Police Impact Fee Fund Balance 55,299$ Total 10,415,602$
1 Admin building square footage reflects Police Department share of total building area; total square footage is 20,444 from the City's insured property schedule; LA County Fire Department occupies approximately 2,000 square feet; facilities share of the police impact fee fund balance based on facilities share of total facilities and vehicles/equipment cost 2 Building replacement cost is the Police Department share of the total replacement cost shown in the City's insured property schedule
3 Site acres reflects Police Department portion of the Police-Fire Administration Building site; site acreage estimated by NBS from satellite photos
4 Site value based on $1,150,000 per acre
5 Replacement cost of furniture, fixtures and equipment (FF&E) based on the personal property cost from the City's insured property schedule
5 Impact fee cost basis = building replacement cost + furniture, fixtures and equipment replacement cost

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City of Covina Page 7-3
Development Impact Fee Study
July 7, 2023
Table 7.3 calculates the City’s existing level of service as a cost per call for service for Police facilities. The cost per call is based on 2021 calls for service and the cost of existing facilities, vehicles and equipment from Tables 7.1 and 7.2.

Table 7.2: Existing Police Department Vehicles and Equipment Quantity
Model
Year Make Assignment
Unit Repl
Cost
Total Repl
Cost
1 2000 Ford CS3 30,000$ 30,000$
1 2002 Ford CS2 30,000$ 30,000$
2 2003 Ford Patrol 68,000$ 136,000$
2 2004 Ford Patrol/CS4 68,000$ 136,000$
1 2005 Ford Supervisor 68,000$ 68,000$
1 2005 Jeep Parking Enf 35,000$ 35,000$
1 2009 Ford Patrol 68,000$ 68,000$
1 2009 Toyota CS4 30,000$ 30,000$
9 2011 Ford Patrol 68,000$ 612,000$
1 2012 Chev Patrol 68,000$ 68,000$
1 2013 Ford Patrol 68,000$ 68,000$
1 2014 Ford Patrol 68,000$ 68,000$
2 2015 Ford K9/Patrol 68,000$ 136,000$
1 2015 Toyota CS1 30,000$ 30,000$
1 2017 Ford Traffic 68,000$ 68,000$
1 2018 Chev Supervisor 68,000$ 68,000$
1 2019 Ford K9 68,000$ 68,000$
2 2020 Ford Patrol 68,000$ 136,000$
100 Portable Police Radios 8,000$ 800,000$
1 Motorola Dispatch Consoles Lump Sum 497,000$
1 CAD RMS System Lump Sum 750,000$
59 Sworn Officer Personal Safety Equipt. 4,000$ 236,000 $ Vehicles/equipment share of Police impact fee fund balance 22,087$ Total 4,160,087$
Source: City of Covina Police Department; vehicles and equipment share of Police impact fee fund balance based on vehicles and equipment percentage of total faclities and vehicles and equipment cost

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City of Covina Page 7-4
Development Impact Fee Study
July 7, 2023
Impact Fees per Unit
Table 7.4 calculates impact fees per unit by development type for Police facilities. Those fees are based on the cost per call from Table 7.3 and calls-for-service-per-unit-per-year factors from Table 2.1.

Table 7.3: Cost per Call - Police Dept. Facilities & Vehicles Cost
Component
Impact Fee
Cost Basis 1
Existing Calls for
Svc per Year 2
Cost per
Call 3
Facilities 10,415,602$ 36,350 286.54$
Vehicles/Equipment 4,160,087$ 36,350 114.45$
Total 14,575,689$ 36,350 400.98$
1 See Tables 7.1 and 7.2
2 See Table 2.2
3 Cost per call = impact fee cost basis / existing calls per year Table 7.4: Police Impact Fees per Unit
Development
Type Units 1
Cost per
Call 2
Calls per Unit
per Year 3
Impact Fee
per Unit 4
Residential: <600 Sq. Ft. DU $400.98 0.87 348.85$
Residential: 600-800 Sq. Ft. DU $400.98 0.92 368.90$
Residential: >800-1,200 Sq. Ft. DU $400.98 0.97 388.95 $ Residential: >1,200-1,900 Sq. Ft. DU $400.98 1.02 409.00$ Residential: >1,900-2,300 Sq. Ft. DU $400.98 1.07 429.05$ Residential: >2,300 Sq. Ft. DU $400.98 1.12 449.10$
Commercial KSF $400.98 4.95 1,983.38$
Office KSF $400.98 0.40 159.87$
Industrial KSF $400.98 0.21 82.97$
Public/Quasi-Public Facilities KSF $400.98 2.33 935.85$ 1 Units of development: DU = dwelling unit; KSF = 1,000 square feet of building floor area
2 See Table 7.3
3 See Table 2.1
4 Impact per unit = cost per call X calls per unit per year

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City of Covina Page 7-5
Development Impact Fee Study
July 7, 2023
Projected Revenue
As noted in Chapter 2, this study includes a forecast of future residential development, but no forecast of future non-residential development. Consequently, the revenue projections in this section are based only on future residential development.

The residential impact fees per unit in Table 7.4 are based on residential unit size in square feet.

Updating the Fees
The impact fees calculated in this chapter are based the current estimated cost of Police facilities, vehicles and equipment. We recommend that the fees be reviewed annually and adjusted as needed using local cost data or an index such as the Engineering News Record Construction Cost Index (CCI). See the Implementation Chapter for more on indexing of fees.

Nexus Summary
As discussed in Chapter 1 of this report, Section 66001 of the Mitigation Fee Act requires that an agency establishing, increasing or imposing impact fees, must make findings to:

Identify the purpose of the fee;
Identify the use of the fee; and,
Determine that there is a reasonable relationship between:
a. The use of the fee and the development type on which it is imposed; b. The need for the facility and the type of development on which the fee is imposed; and
Table 7.5: Projected Revenue - Police Impact Fees
Development Cost per Avg Calls per Added Res. Projected Type Call 1
Res. Unit 2Units 3Revenue 4
All Residential $400.98 1.1 1,863 821,732$
Total 821,732$
1 See Table 7.3
2 Average calls per residential unit estimated by NBS; see calls per unit per year factors in Table 2.1
3 See Table 2.3
4 Projected revenue = cost per call X calls per residential unit per year X added residential units

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City of Covina Page 7-6
Development Impact Fee Study
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c. The amount of the fee and the facility cost attributable to the development project.

Purpose of the Fee: The purpose of the impact fees calculated in this chapter is to mitigate the impact of new development on the need for Police facilities in Covina.

Use of the Fee. Impact fees calculated in this chapter will be used to provide additional or improved Police facilities, and additional vehicles and equipment to mitigate the impacts of new development in the City. As provided by the Mitigation Fee Act, revenue from impact fees may also be used for temporary loans from one impact fee fund or account to another.

Reasonable Relationship between the Use of the Fee and the Development Type on Which It Is Imposed. The impact fees calculated in this chapter will be used to provide additional or improved Police facilities, and additional vehicles and equipment to serve the needs of new development in Covina.

Reasonable Relationship between the Need for the Facilities and the Type of Development on Which the Fee Is Imposed. New development increases the need for Police facilities to maintain the existing level of service as described earlier in this chapter. Without additional or improved Police facilities, the increase in demand associated with new development would result in a reduction in the level of service provided to all development the City.

Reasonable Relationship between the Amount of the Fee and the Facility Cost Attributable to the Development Project. The amount of the impact fees for Police facilities calculated in this chapter depends on the number of calls for service per unit per year associated with each category of development. The fees per unit of development calculated in this chapter for each type of development are based on the estimated number of calls per unit per year associated with that type of development in Covina. Thus, the fee charged to a development project reflects the impact of that project on the need for Police facilities in the City.

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City of Covina Page 8-1
Development Impact Fee Study
July 7, 2023
Chapter 8. Fire Protection Facilities
This chapter calculates impact fees for Fire Department facilities in Covina. Covina contracts with the Los Angeles County Fire department to provide fire protection and emergency response services to the City. The City owns all three fire stations in the City as well as the Police-Fire Administration Building which is partly occupied by Fire Department staff. The County Fire Department owns the apparatus and vehicles assigned to Covina. Those assets will not be addressed in this study.

Methodology
This chapter calculates impact fees using the standard-based method discussed in Chapter 1.

Service Area
The impact fees calculated in this chapter are intended to apply to all new development in the City.

Demand Variable
A “demand variable” is a quantifiable attribute of development that is used in impact fee calculation formulas to represent the impact of development on a particular type of capital facilities. The demand variable used to calculate impact fees for Fire department facilities in this chapter is calls for service per year.

Impact fees calculated in this chapter for different categories of development vary depending on the number of calls for service per unit per year generated by each category. The calls-for-serviceper-unit-per-year factors used to calculate impact fees for Fire Department facilities in this study are derived from analysis of a random sample of all of the Fire Department calls for service for calendar year 2021. The Los Angeles County Fire Department logged 5,138 calls for service in Covina in 2021. A list of those calls was provided to the City with locations indicated by geographic coordinates. The City converted the locations into addresses using a GIS program.

NBS took a random sample of 425 of those calls and classified them by the type of development where the call originated. Of the 425 sampled calls, 33 could not be classified because of apparent address errors. Statistically, the remaining 392 calls represent a sample large enough to reach a margin of error of 4.75% at a 95% confidence level.

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City of Covina Page 8-2
Development Impact Fee Study
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development type was divided by the number of existing units of that type to arrive at a callsper-unit-per year factor for each type of development.

For residential development, Fire Department calls for service could not be identified for each unit-size category used in this study, so calls-per-unit-per-year factors were calculated for singlefamily, multi-family and mobile home unit types. The range of factors for those unit types was then used to establish a range of factors for all residential unit size categories used in this study as shown in Table 2.1 in Chapter 2 and in Table 8.3 in this chapter. It should also be noted that calls for service to parks and schools were reallocated to residential development which creates the need for the parks and schools.

Existing Facilities and Existing Level of Service
In 2021, AB 602 added Section 66016.5 to the Mitigation Fee Act. That section requires, after January 1, 2022, that the level of service used in an impact fee study must be compared with the existing level of service. If the level used in the impact fee study exceeds the existing level of service, an explanation is required. The impact fees calculated in this chapter are based on the existing level of service as shown in Table 8.2 on the next page, so there is no level-of-service issue in the calculation of impact fees in this chapter with respect to Section 66016.5.

In this chapter, the existing level of service for Fire Department facilities is based on the relationship between the current number of calls for service per year and the replacement cost of existing facilities. Table 8.1 lists the City-owned buildings used by the Los Angeles County Fire Department to serve the City of Covina. The impact fee cost basis for each building in Table 8.1 is the sum of the building replacement cost and site value.

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City of Covina Page 8-3
Development Impact Fee Study
July 7, 2023
Table 8.2 calculates the City’s existing level of service as a cost per call for service for Fire Department facilities. The cost per call is based on 2021 calls for service and the cost of existing facilities from Table 8.1.

Impact Fees per Unit
Table 8.3 calculates impact fees per unit by development type for Fire Department facilities.

Those fees are based on the cost per call from Table 8.2 and calls-for-service-per-unit-per-year factors from Table 2.1.

Although impact fees are shown here for the Public/Quasi-Public category, the City does not have the authority to impose most impact fees on public schools or on projects constructed by other governmental entities. In addition, projects such as churches, hospitals and private schools, Table 8.1: Existing Fire Department Facilities
Constr Building Bldg Repl Site Site FF&E Repl Impact Fee Facility Date Sq Ft 1
Cost 2 Acres 3Value 4Cost 5 Cost Basis 6
Police-Fire Admin Bldg 1976 2,000 457,024$ 0.17 195,500$ 0$ 652,524$ Fire Station #152 1958 4,552 1,113,305$ 0.90 1,035,000$ 0$ 2,148,305$ Fire Station #153 1961 4,552 1,113,305$ 1.14 1,311,000$ 0$ 2,424,305$ Training Tower 1965 686 103,418 Included 0$ 103,418$
Fire Station #154 1976 10,834 2,944,474$ 0.69 793,500$ 0$ 3,737,974$ Fire impact fee fund balance 108,873$
Total 9,175,399$
1 Admin building square footage reflects Fire Department share of total building area; total square footage is 20,444 from the City's insured property schedule 2 Building replacement cost is the Fire Department share of the total replacement cost shown in the City's insured property schedule
3 Site acres estimated by NBS based on satellite photos 4 Site value based on $1,150,000 per acre
5 Furniture, fixtures and equipment (FF&E) located in Fire Department buildings are assumed to be property of the Los Angeles County Fire Department which operates those facilities 6 Impact fee cost basis = building replacement cost + site value; impact fee fund balance provided by the City of Covina Finance Department
Table 8.2: Cost per Call - Fire Department Facilities
Impact Fee
Cost Basis 1
Existing Calls for
Svc per Year 2
Cost per
Call 3
$9,175,399 5,160 $1,778.13
1 See Table 8.1
2 See Table 2.2
3 Cost per call = impact fee cost basis / existing calls for service per year

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City of Covina Page 8-4
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July 7, 2023
which are not legally exempt from impact fees, may vary in their impacts and may require that impact fees be based on their actual impact, such as the number of peak hour trips they generate.

Projected Revenue
As noted in Chapter 2, this study includes a forecast of future residential development, but no forecast of future non-residential development. Consequently, the revenue projections in this section are based only on future residential development.

The residential impact fees per unit in Table 8.4 are based on residential unit size in square feet.

Although Table 2.3 in Chapter 2 shows a forecast of total future residential units to 2040, it is not possible to forecast the number of units in each unit-size category. Consequently, potential revenue from residential impact fees calculated in Table 8.5 is based on the cost per call for service, the average calls per service per residential unit and the number of future residential units. Any impact fee revenue from future non-residential development in Covina would be in addition to the amount projected in Table 8.5
Table 8.3: Fire Impact Fees per Unit
Development
Type Units 1
Cost per
Call 2
Calls per Unit
per Year 3
Impact Fee
per Unit 4
Residential: <600 Sq. Ft. DU $1,778.13 0.09 160.03$
Residential: 600-800 Sq. Ft. DU $1,778.13 0.13 231.16$
Residential: >800-1,200 Sq. Ft. DU $1,778.13 0.17 302.28$ Residential: >1,200-1,900 Sq. Ft. DU $1,778.13 0.21 373.41$ Residential: >1,900-2,300 Sq. Ft. DU $1,778.13 0.25 444.53$ Residential: >2,300 Sq. Ft. DU $1,778.13 0.29 515.66$
Commercial KSF $1,778.13 0.28 497.88$
Office KSF $1,778.13 0.10 177.81$
Industrial KSF $1,778.13 0.07 124.47$
Public/Quasi-Public Facilities KSF $1,778.13 0.42 746.82$ 1 Units of development: DU = dwelling unit; KSF = 1,000 square feet of building floor area
2 See Table 8.2
3 See Table 2.1
4 Impact per unit = cost per call X calls per unit per year

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City of Covina Page 8-5
Development Impact Fee Study
July 7, 2023
Updating the Fees
The impact fees calculated in this chapter are based the current estimated cost of Fire Department facilities. We recommend that the fees be reviewed annually and adjusted as needed using local cost data or an index such as the Engineering News Record Construction Cost Index (CCI). See the Implementation Chapter for more on indexing of fees.

Nexus Summary
As discussed in Chapter 1 of this report, Section 66001 of the Mitigation Fee Act requires that an agency establishing, increasing or imposing impact fees, must make findings to:

Purpose of the Fee: The purpose of the impact fees calculated in this chapter is to mitigate the impact of new development on the need for Fire Department facilities in Covina.

Use of the Fee. Impact fees calculated in this chapter will be used to provide additional or improved Fire Department facilities to mitigate the impacts of new development in the City. As Table 8.4: Projected Revenue - Fire Impact Fees
Development Cost per Avg Calls per Added Res. Projected Type Call 1
Res. Unit 2Units 3Revenue 4
All Residential $1,778.13 0.2 1,863 662,532$
Total 662,532$
1 See Table 8.3
2 Average calls per residential unit estimated by NBS; see calls per unit per year factors in Table 2.1
3 See Table 2.3
4 Projected revenue = cost per call X calls per residential unit per year X added residential units

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provided by the Mitigation Fee Act, revenue from impact fees may also be used for temporary loans from one impact fee fund or account to another.

Reasonable Relationship between the Use of the Fee and the Development Type on Which It Is Imposed. The impact fees calculated in this chapter will be used to provide additional or improved Fire Department facilities to serve the needs of new development in Covina.

Reasonable Relationship between the Need for the Facilities and the Type of Development on Which the Fee Is Imposed. New development increases the need for Fire Department facilities to maintain the existing level of service as described earlier in this chapter. Without additional or improved Fire Department facilities, the increase in demand associated with new development would result in a reduction in the level of service provided to all development the City.

Reasonable Relationship between the Amount of the Fee and the Facility Cost Attributable to the Development Project. The amount of the impact fees for Fire Department facilities calculated in this chapter depends on the number of calls for service per unit per year associated with each category of development. The fees per unit of development calculated in this chapter for each type of development are based on the estimated number of calls per unit per year associated with that type of development in Covina. Thus, the fee charged to a development project reflects the impact of that project on the need for Fire Department facilities in the City.

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Chapter 9. Street Improvements and Traffic Signals
This chapter calculates impact fees for street improvements and traffic signals in Covina.

Methodology
This chapter calculates impact fees using the standard-based method discussed in Chapter 1.

Standard-based fees are calculated using a specified relationship or standard that determines the number of service units to be provided for each unit of development. The impact fees calculated in this chapter are based on the City’s existing level of service (LOS) as defined in the section titled Existing Facilities and Existing Level of Service, below. Impact fees calculated in that manner are intended to provide the funding needed to maintain the existing level of service as the City grows.

Service Area
The impact fees calculated in this chapter are intended to apply to all new development in the City.

Demand Variable
A “demand variable” is a quantifiable attribute of development that is used in impact fee calculation formulas to represent the impact of development on a particular type of capital facilities. The demand variable used to calculate impact fees for streets and traffic signals in this chapter is peak hour trips per day.

Impact fees calculated in this chapter for different categories of development vary depending on the number of peak hour trips per day generated by each category. The peak hour trip factors used to calculate impact fees for streets and traffic signals in this study are based on the Institute of Transportation Engineers (ITE) weekday p.m. peak hour rate from the 11th edition of Trip Generation.

Existing Facilities and Existing Level of Service
In 2021, AB 602 added Section 66016.5 to the Mitigation Fee Act. That section requires, after January 1, 2022, that the level of service used in an impact fee study must be compared with the existing level of service. If the level used in the impact fee study exceeds the existing level of service, an explanation is required. The impact fees calculated in this chapter are based on the existing level of service as shown in Table 9.3 on the next page, so there is no level-of-service issue in the calculation of impact fees in this chapter with respect to Section 66016.5.

In this chapter, the existing level of service for streets and traffic signals is based on the relationship between the number of peak hour trips per day generated by existing development in Covina and the replacement cost of existing arterial and collector streets and traffic signals.

Table 9.1 calculates the replacement cost of the City’s existing arterial and collector streets. That cost is shown in Table 9.1 as the impact fee cost basis. No right-of-way costs are included in the impact fees calculated in this chapter. Replacement cost is used here to reflect the cost of constructing additional street improvements needed to serve new development.

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Table 9.2 calculates the replacement cost of the City’s existing traffic signals. That cost is shown in Table 9.2 as the impact fee cost basis.

Table 9.3 calculates the City’s existing level of service as a cost per peak hour trip for arterial and collector streets and traffic signals. The cost per peak hour trip is based on the number of existing peak hour trips and the impact fee cost basis for existing streets and signals from Tables 9.1 and

9.2. Table 9.1: Existing Arterial and Collector Streets Lane-Miles of Existing Cost per Impact Fee
Arterial/Collector Streets 1Lane-Mile 2 Cost Basis 3
141.3 $2,500,000 353,250,000.00$
Facilities share of street impact fee fund balance 771,286.26$ Total 354,021,286.26$
1 Lane-Miles of existing arterial and collector streets based on data from the Covina 2020-2025 Pavement Management Program
2 Replacement cost per lane-mile estimated by the Covina City Engineer 3 Impact fee cost basis = lane miles of existing arterial/collector streets X replacement cost per lane-mile; impact fee fund balance provided by the City of Covina Finance Department; the streets share of the impact fee fund balance based on the streets percentage of the total streets and traffic signals cost
Table 9.2: Existing Traffic Signals
Number of Existing Average Cost per Impact Fee
Traffic Signals 1Traffic Signal 1 Cost Basis 2
51 $800,000 $ 40,800,000.00
Signals share of street impact fee fund balance $ 89,082.74 Total $ 40,889,082.74
1 Number of existing traffic signals and average cost per signal provided by the Covina City Engineer
2 Impact fee cost basis = number of traffic signals X average replacement cost per signal; traffic signals share of street impact fee fund balance based on traffic signals percentage of total streets and traffic signals cost

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Impact Fees per Unit
Table 9.4 calculates impact fees per unit by development type for arterials and collector streets.

Those fees are based on the cost per peak hour trip from Table 9.3 and peak hour trips per unit factors from Table 2.1.

Table 9.3: Streets and Traffic Signals - Cost per Peak Hour Trip Cost
Component
Impact Fee
Cost Basis 1
Existing Peak
Hour Trips 2
Cost per Peak
Hour Trip 3
Arterial/Collector Streets $ 354,021,286 27,318 $ 12,959.31 Traffic Signals 40,889,083$ 27,318 $ 1,496.79
Total 394,910,369$ 27,318 14,456.10$
1 See Tables 9.1 and 9.2
2 See Table 2.2
3 Cost per peak hour trip = impact fee cost basis / existing peak hour trips Table 9.4: Arterial and Collector Streets - Impact Fees per Unit Development
Type Units 1
Cost per Peak
Hour Trip 2
Peak Hour Trips
per Unit 3
Impact Fee
per Unit 4
Residential: <600 Sq. Ft. DU $12,959.31 0.44 5,702.10$
Residential: 600-800 Sq. Ft. DU $12,959.31 0.56 7,257.21$ Residential: >800-1,200 Sq. Ft. DU $12,959.31 0.70 9,071.52$ Residential: >1,200-1,900 Sq. Ft. DU $12,959.31 0.85 11,015.41$ Residential: >1,900-2,300 Sq. Ft. DU $12,959.31 0.99 12,829.72$ Residential: >2,300 Sq. Ft. DU $12,959.31 1.10 14,255.24$ Commercial KSF $12,959.31 2.29 29,624.98$
Office KSF $12,959.31 1.15 14,903.21$
Industrial KSF $12,959.31 0.41 5,313.32$
Public/Quasi-Public Facilities KSF $12,959.31 1.15 14,903.21$ 1 Units of development: DU = dwelling unit; KSF = 1,000 square feet of building floor area
2 See Table 9.3
3 See Table 2.1
4 Impact per unit = cost per peak hour trip X peak hour trips per unit

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Table 9.5 calculates impact fees per unit by development type for traffic signals. Those fees are based on the cost per peak hour trip from Table 9.3 and peak hour trips per unit factors from Table 2.1.

The residential impact fees per unit in Tables 9.4 and 9.5 are based on residential unit size in square feet. Although Table 2.3 in Chapter 2 shows a forecast of total future residential units to 2040, it is not possible to forecast the number of units in each unit-size category. Consequently, potential revenue from residential impact fees calculated in Tables 9.6 and 9.7 are based on the cost per peak hour trip and the number of added peak hour trips to 2040. Any impact fee revenue from future non-residential development in Covina would be in addition to the amounts projected in Tables 9.6 and 9.7
Table 9.6 projects impact fee revenue from future residential development using the cost per peak hour trip for arterial and collector streets and the number of added peak hour trips to 2040.

Table 9.5: Traffic Signals - Impact Fees per Unit
Development
Type Units 1
Cost per Peak
Hour Trip 2
Peak Hour Trips
per Unit 3
Impact Fee
per Unit 4
Residential: <600 Sq. Ft. DU $1,496.79 0.44 $ 658.59
Residential: 600-800 Sq. Ft. DU $1,496.79 0.56 $ 838.20 Residential: >800-1,200 Sq. Ft. DU $1,496.79 0.70 $ 1,047.75 Residential: >1,200-1,900 Sq. Ft. DU $1,496.79 0.85 $ 1,272.27 Residential: >1,900-2,300 Sq. Ft. DU $1,496.79 0.99 $ 1,481.82 Residential: >2,300 Sq. Ft. DU $1,496.79 1.10 $ 1,646.47 Commercial KSF $1,496.79 2.29 $ 3,421.65
Office KSF $1,496.79 1.15 $ 1,721.30
Industrial KSF $1,496.79 0.41 $ 613.68
Public/Quasi-Public Facilities KSF $1,496.79 1.15 $ 1,721.30 1 Units of development: DU = dwelling unit; KSF = 1,000 square feet of building floor area
2 See Table 9.3
3 See Table 2.1
4 Impact per unit = cost per peak hour trip X peak hour trips per unit

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Table 9.7 calculates projected revenue for the traffic impact fees, using the cost per peak hour trip for traffic signals and the number of added peak hour trips to 2040.

Updating the Fees
The impact fees calculated in this chapter are based the current estimated cost of street improvements and traffic signals. We recommend that the fees be reviewed annually and adjusted as needed using local cost data or an index such as the Engineering News Record Construction Cost Index (CCI). See the Implementation Chapter for more on indexing of fees.

Nexus Summary
As discussed in Chapter 1 of this report, Section 66001 of the Mitigation Fee Act requires that an agency establishing, increasing or imposing impact fees, must make findings to:

Identify the purpose of the fee;
Identify the use of the fee; and,
Determine that there is a reasonable relationship between:
a. The use of the fee and the development type on which it is imposed; b. The need for the facility and the type of development on which the fee is imposed; and
Table 9.6: Projected Revenue - Street Impact Fees
Development Cost per Peak Added Res. Peak Projected
Type Hour Trip 1
Hour Trips 2Revenue 3
All Residential $12,959.31 1,304 16,898,941$
Total 16,898,941$
1 See Table 9.3
2 Added residential peak hour trips; see Table 2.3
4 Projected revenue = cost per peak hour trip X added residential peak hour trips
Table 9.7: Projected Revenue - Traffic Signal Impact Fees Development Cost per Peak Added Res. Peak Projected
Type Hour Trip 1
Hour Trips 2Revenue 3
All Residential $1,496.79 1,304 1,951,810$
Total 1,951,810$
1 See Table 9.3
2 Added residential peak hour trips; see Table 2.3
4 Projected revenue = cost per peak hour trip X added residential peak hour trips

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c. The amount of the fee and the facility cost attributable to the development project.

Purpose of the Fee: The purpose of the impact fees calculated in this chapter is to mitigate the impact of new development on the need for streets and traffic signals facilities in Covina.

Use of the Fee. Impact fees calculated in this chapter will be used to provide street improvements and traffic signals to mitigate the impacts of new development on Covina’s street system. As provided by the Mitigation Fee Act, revenue from impact fees may also be used for temporary loans from one impact fee fund or account to another.

Reasonable Relationship between the Use of the Fee and the Development Type on Which It Is Imposed. The impact fees calculated in this chapter will be used to provide street improvements and traffic signals to mitigate the impacts of new development on Covina’s street system.

Reasonable Relationship between the Need for the Facilities and the Type of Development on Which the Fee Is Imposed. New development generates additional vehicle traffic that increases the need for street capacity and traffic signals to maintain the existing level of service as described earlier in this chapter. Without additional street improvements and traffic signals, the increase in demand associated with new development would result in a reduction in the level of service provided to all development the City.

Reasonable Relationship between the Amount of the Fee and the Facility Cost Attributable to the Development Project. The amount of the impact fees for streets and traffic signals calculated in this chapter depends on the number of peak hour trips generated by each category of development. The fees per unit of development calculated in this chapter for each type of development are based on the estimated number of peak hour trips per unit associated with that type of development in Covina. Thus, the fee charged to a development project reflects the impact of that project on the need for street improvements and traffic signals in the City.

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Chapter 10. Implementation
This chapter of the report contains recommendations for adoption and administration of impact fees, and for the interpretation and application of the development impact fees and in-lieu fees calculated in this study. It was not prepared by an attorney and is not intended as legal advice.

Statutory requirements for the adoption and administration of fees imposed as a condition of development approval (impact fees) are found in the Mitigation Fee Act (Government Code Sections 66000 et seq.).

Adoption
The form in which development impact fees are enacted should be determined by the City attorney. The specific requirements are different for impact fees under the Mitigation Fee Act, and for park land dedication and in-lieu fees under the Quimby Act. The latter requirements must be adopted by ordinance and are subject to the same noticing and public hearing procedures as any ordinance.

Procedures for adoption of fees subject to the Mitigation Fee Act, including notice and publichearing requirements, are specified in Government Code Sections 66016 and 66018. It should be noted that Section 66018 refers to Government Code Section 6062a, which requires that the public hearing notice be published at least twice during the 10-day notice period. However, Section 66016.5 added by AB 602 in 2021 requires that impact fee nexus studies be adopted at a public hearing with at least 30-days’ notice.

Government Code Section 66017 provides that fees subject to the Mitigation Fee Act do not become effective until 60 days after final action by the governing body.

Actions establishing or increasing fees subject to the Mitigation Act require certain findings, as set forth in Government Code Section 66001 and discussed in Chapter 1 of this report.

Examples of findings that could be used for impact fees calculated in this study are shown below.

The specific language of such findings should be provided by the City Attorney. A more complete discussion of the nexus for each fee can be found in individual chapters of this report.

Sample Finding: Purpose of the Fee. The City Council finds that the purpose of the impact fees hereby enacted is to protect the public health, safety and welfare by requiring new development to contribute to the cost of public facilities needed to mitigate the impacts of new development.

Sample Finding: Use of the Fee. The City Council finds that revenue from the impact fees hereby enacted will be used to provide public facilities needed to mitigate the impacts of

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new development in the City and identified in the 2023 City of Covina Development Impact Fee Study by NBS. 2
Sample Finding: Reasonable Relationship: Based on analysis presented in the 2023 City of Covina Development Impact Fee Study by NBS, the City Council finds that there is a reasonable relationship between:
a. The use of the fees and the types of development projects on which they are imposed; and,
b. The need for facilities and the types of development projects on which the fees are imposed.

Administration
The California Mitigation Fee Act (Government Code Sections 66000 et seq.) mandates procedures for administration of impact fee programs, including collection and accounting, reporting, and refunds. References to code sections in the following paragraphs pertain to the California Government Code.

Notices and Statute of Limitations. Section 66006 (f) provides that a local agency, at the time it imposes a fee for public improvements on a specific development project, "... shall identify the public improvement that the fee will be used to finance." The required notification could refer to the improvements identified in this study or to a capital improvement plan.

Section 66020 (d) (1) requires that the agency, at the time it imposes an impact fee, provide a written statement of the amount of the fee and written notice of a 90-day period during which the imposition of the fee can be protested. Failure to protest imposition of the fee during that period may deprive the fee payer of the right to subsequent legal challenge.

Section 66022 (a) provides a separate procedure for challenging the establishment of an impact fee. Such challenges must be filed within 120 days of enactment.

Collection of Fees. Section 66007(a) provides that a local agency shall not require payment of fees by developers of residential projects prior to the date of final inspection, or issuance of a certificate of occupancy, whichever occurs first.

However, "utility service fees" (not defined, but likely referring to water and sewer connections) may be collected upon application for utility service. In a residential development project of more than one dwelling unit, Section 66007 (a) allows the agency to choose to collect fees either for 2 According to Gov’t Code Section 66001 (a) (2), the use of the fee may be specified in a capital improvement plan, the General Plan, or other public documents that identify the public facilities for which the fee is charged. The findings recommended here identify this impact fee study as the source of that information. Also note that Section 66016.5 (a)(6) requires that large jurisdictions adopt a capital improvement plan as part of an impact fee nexus study. That requirement applies in counties of 250,000 or more and cities in those counties.

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individual units or for phases upon final inspection, or for the entire project upon final inspection of the first dwelling unit completed.

Section 66007 (b) provides two exceptions when the local agency may require the payment of fees from developers of residential projects at an earlier time: (1) when the local agency determines that the fees “will be collected for public improvements or facilities for which an account has been established and funds appropriated and for which the local agency has adopted a proposed construction schedule or plan prior to final inspection or issuance of the certificate of occupancy” or (2) the fees are “to reimburse the local agency for expenditures previously made.”
Statutory restrictions on the time at which fees may be collected do not apply to non-residential development.

Notwithstanding the foregoing restrictions, some cities collect impact fees for all facilities at the time building or grading permits are issued, and builders may find it convenient to pay the fees at that time.

In cases where the fees are not collected upon issuance of building permits, Sections 66007 (c) (1) and (2) provide that the City may require the property owner to execute a contract to pay the fee, and to record that contract as a lien against the property until the fees are paid.

Earmarking and Expenditure of Fee Revenue. Section 66006 (a) mandates that fees be deposited “with other fees for the improvement in a separate capital facilities account or fund in a manner to avoid any commingling of the fees with other revenues and funds of the local agency, except for temporary investments, and expend those fees solely for the purpose for which the fee was collected.” Section 66006 (a) also requires that interest earned on the fee revenues be placed in the capital account and used for the same purpose.

The language of the law is not clear as to whether depositing fees "with other fees for the improvement" refers to a specific capital improvement or a class of improvements (e.g., street improvements).

We are not aware of any municipality that has interpreted that language to mean that funds must be segregated by individual projects. And, as a practical matter, that approach would be unworkable because it would mean that no pay-as-you-go project could be constructed until all benefiting development had paid the fees. Common practice is to maintain separate funds or accounts for impact fee revenues by facility category (i.e., streets, park improvements), but not for individual projects.

Impact Fee Exemptions, Reductions, and Waivers. In the event that a development project is found to have no impact on facilities for which impact fees are charged, such project must be exempted from the fees.

If a project has characteristics that will make its impacts on a particular public facility or infrastructure system significantly and permanently smaller than the average impact used to calculate impact fees in this study, the fees should be reduced accordingly to meet the requirement that there must be a reasonable relationship between the amount of the fee and

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the cost of the public facility attributable to the development on which the fee is imposed. The fee reduction is required if the fee is not proportional to the impact of the development on relevant public facilities.

In some cases, an agency may desire to voluntarily waive or reduce impact fees that would otherwise apply to a project as a way of promoting goals such as affordable housing or economic development. Such a waiver or reduction is within the discretion of the governing body but may not result in increased costs to other development projects. So, the effect of such policies is that the lost revenue must be made up from sources other than impact fees.

Credit for Improvements Provided by Developers. If the City requires a developer, as a condition of project approval, to dedicate land or construct facilities or improvements for which impact fees are charged, the City should ensure that the impact fees are adjusted so that the overall contribution by the developer does not exceed the impact created by the development.

In the event that a developer voluntarily offers to dedicate land, or construct facilities or improvements in lieu of paying impact fees, the City may accept or reject such offers, and may negotiate the terms under which such an offer would be accepted. Excess contributions by a developer may be offset by reimbursement agreements.

Credit for Existing Development. If a project involves replacement, redevelopment or intensification of previously existing development, impact fees should be applied only to the portion of the project that represents a net increase in demand for relevant City facilities, applying the measure of demand used in this study to calculate that impact fee.

Annual Report. Section 66006 (b) (1) requires that once each year, within 180 days of the close of the fiscal year, the local agency must make available to the public the following information for each separate account established to receive impact fee revenues:

1. A brief description of the type of fee in the account or fund;

2. The amount of the fee;

3. The beginning and ending balance of the account or fund;

4. The amount of the fees collected and interest earned;

5. Identification of each public improvement on which fees were expended and the amount of the expenditures on each improvement, including the percentage of the cost of the public improvement that was funded with fees;

6. Identification of the approximate date by which the construction of a public improvement will commence, if the City determines sufficient funds have been collected to complete financing of an incomplete public improvement;

7. A description of each inter-fund transfer or loan made from the account or fund, including interest rates, repayment dates, and a description of the improvement on which the transfer or loan will be expended;

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8. The amount of any refunds or allocations made pursuant to Section 66001, paragraphs (e) and (f).

The annual report must be reviewed by the City Council at its next regularly scheduled public meeting, but not less than 15 days after the statements are made public, per Section 66006 (b) (2).

Five-Year Findings and Refunds under the Mitigation Fee Act. Prior to 1996, The Mitigation Fee Act required that a local agency collecting impact fees was required to expend or commit impact fee revenue within five years or make findings to justify a continued need for the money.

Otherwise, those funds had to be refunded. SB 1693, adopted in 1996 as an amendment to the Mitigation Fee Act, changed that requirement in material ways.

Now, Section 66001 (d) requires that, for the fifth fiscal year following the first deposit of any impact fee revenue into an account or fund as required by Section 66006 (b), and every five years thereafter, the local agency shall make all of the following findings for any fee revenue that remains unexpended, whether committed or uncommitted:

1. Identify the purpose to which the fee will be put;

2. Demonstrate the reasonable relationship between the fee and the purpose for which it is charged;

3. Identify all sources and amounts of funding anticipated to complete financing of incomplete improvements for which impact fees are to be used;

4. Designate the approximate dates on which the funding necessary to complete financing of those improvements will be deposited into the appropriate account or fund.

Those findings are to be made in conjunction with the annual reports discussed above. If such findings are not made as required by Section 66001, the local agency could be required to refund the moneys in the account or fund, per Section 66001 (d).

Once the agency determines that sufficient funds have been collected to complete financing on incomplete improvements for which impact fee revenue is to be used, it must, within 180 days of that determination, identify an approximate date by which construction of the public improvement will be commenced (Section 66001 (e)). If the agency fails to comply with that requirement, it must refund impact fee revenue in the account according to procedures specified in Section 66001 (d).

For a useful discussion of the foregoing requirements, see “The Mitigation Fee Act’s Five-Year Findings Requirement: Beware Costly Pitfalls” by Glen Hansen, Senior Counsel, Abbott and Kindermann, and Rick Jarvis, Managing Partner, Jarvis, Fay and Gibson, presented at the 2022 League of California Cities City Attorneys Spring Conference.

Audit Requests. Section 66023 provides that any person may request an audit to determine whether any fee or charge levied by a local agency exceeds the amount reasonably necessary to cover the cost of any product, public facility, as defined in Section 66000, or service provided by

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the local agency. The legislative body of the local agency may retain an independent auditor to conduct the audit but is not required to conduct an audit if an audit has been performed for the same fee within the previous 12 months.

The agency shall retain an independent auditor to conduct an audit only if the person who requests the audit deposits with the local agency the amount of the local agency’s reasonable estimate of the cost of the independent audit. At the conclusion of the audit, the local agency shall reimburse unused sums, if any, or the requesting person shall pay the local agency the excess of the actual cost of the audit over the amount that was deposited.

However, if the local agency fails to comply with the annual report requirement of Section 66006 following the establishment, increase or imposition of a fee, but requires payment of that fee in connection with the approval of a development project for three consecutive years, the agency shall not require a deposit for the independent audit and shall pay the cost of the audit.

Indexing of In-Lieu/Impact Fees. In-lieu fees and impact fees calculated in this report are based on current costs and should be adjusted periodically to account for changes in the cost of facilities or other capital assets that will be funded by those fees. That adjustment is intended to account for escalation in costs for land, construction, vehicles and other relevant capital assets. The Engineering News Record Building Cost Index (BCI) and Construction Cost Index (CCI) are useful for indexing construction costs. Where land costs are covered by an impact fee or in-lieu fee, land costs should be adjusted based on changes in local land prices.

Requirements Imposed by AB 602
In 2021, the California Legislature passed AB 602 and the Governor signed it into law. AB 602 creates some new requirements for impact fees that will go into effect in 2022. The new law amends Government Code Section 65940.1 and adds Section 66016.5 to impose the following requirements:
1) A city, county or special district that has an internet website shall post on its website:
a) A current written schedule of fees, exactions and affordability requirements applicable to a proposed housing development project, and shall present that information in a manner that identifies the fees, exactions and affordability requirements that apply to each parcel and the fees that apply to each new water and sewer utility connection b) All zoning ordinances and development standards and specifying the zoning, design and development standards that apply to each parcel
c) A list of the information that will be required from any applicant for a development project, as specified in Government Code Section 69540
d) The current and five previous annual fee reports required by Government Code Section 66006 and Subsection 66013 (d).
e) An archive of impact fee nexus studies, cost of service studies or equivalent conducted on or after January 1, 2018.

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2) The above information shall be updated within 30 days of any changes 3) A City or County shall request from a development proponent, upon issuance of a certificate of occupancy or final inspection, the total amount of fees and exactions associated with the project for which the certificate it issued. That information must be posted on the website and updated at least twice a year.
4) Before adoption of an impact fee, an impact fee nexus study shall be adopted. 5) When applicable, the nexus study shall identify the existing level of service for each public facility, identify the proposed new level of service and explain why the new level of service is appropriate
6) If a nexus study supports the increase of an existing fee, the local agency shall review the assumptions of the nexus study supporting the original fee and evaluate the amount of the fees collected under the original fee.
7) A nexus study adopted after July 1, 2022, shall calculate a fee imposed on a housing development project proportionately to the square footage of the proposed units of the development. A local agency that imposes a fee proportionately to the square footage if the proposed units of the development shall be deemed to have used a valid method to establish a reasonable relationship between the fee charged and the burden posed by the development. A nexus study is not required to comply with this requirement if the agency makes certain findings outlined in the statute.
8) Large jurisdictions as defined in Section 53559.1 (d) of the Health and Safety Code (counties of 250,000 or more and cities in those counties) shall adopt a capital improvement plan as part of a nexus study.
9) All studies shall be adopted at a public hearing with at least 30-days’ notice, and the local agency shall notify any member of the public that requests notice of intent to begin an impact fee nexus study of the date of the hearing.
10) Studies shall be updated at least every eight years, beginning on January 1, 2022.

Training and Public Information
Effective administration of an impact fee program requires considerable preparation and training. It is important that those responsible for collecting the fees, and for explaining them to the public, understand both the details of the fee program and its supporting rationale.

It is also useful to pay close attention to handouts that provide information to the public regarding impact fees. Impact fees should be clearly distinguished from other fees, such as user fees for application processing, and the purpose and use of particular impact fees should be made clear.

Finally, anyone responsible for accounting, capital budgeting, or project management for projects involving impact fees must be fully aware of the restrictions placed on the expenditure of impact fee revenues. Fees must be expended for the purposes identified in the impact fee

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Development Impact Fee Study
July 7, 2023
nexus study in which they were calculated, and the City must be able to show that funds have been properly expended.

Recovery of Administrative Costs
To recover the cost of periodic impact fee update studies and ongoing staff costs for capital budgeting, annual reports, five-year updates and other requirements of the Mitigation Fee Act, an administrative charge may be added to the impact fees calculated in this report. See the Executive Summary for a discussion of an administrative charge to recover some costs for administration and updating of impact fees.

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APPENDIX A
Fee Comparison
Prepared by NBS for the City of Covina

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APPENDIX A
City of Covina 2023 Impact Fee Study - Fee Comparison
Development Impact Fee Type Units 1 Current Fee 2 Proposed Fee 3 CLAREMONT 4 GLENDORA 5 MONTEREY PARK 6 SAN DIMAS 7 SAN GABRIEL 8 WEST COVINA 9 Residential - Single-Family
Park Land and Improvements DU $ 7,280 5,380 $ $ 4,400 2,273 $ 4,409 $ 600 $ 3,392 $ 2,198 $ Recreation Facilities DU $ 1,124 792 $ Public Buildings (Incl Libraries) DU $ 2,907 1,674 $ $ County Library 1,851 $ 194Police DU $ 409 956 $ $ Sheriff Contract 903 526 $ 732 $ Fire DU $ 373 458 $ 360 $ $ Fire District 272 640 $ 893 $ Streets/Signals DU $ 12,287 2,334 $ 298 $ $ 1,791 $ 2,753 Total Residential - Single-Family $ 24,380 11,594 $ 5,058 $ 2,273 $ 9,217 $ 600 $ 7,320 $ 4,017 $ Residential - Multi-Family Park Land and Improvements DU $ 2,768 4,149 $ $ 4,400 1,591 $ 4,473 $ 400 $ 3,392 $ 1,570 $ Recreation Facilities DU $ 427 610 $ Public Buildings (Incl Libraries) DU $ 1,110 1,292 $ $ County Library 1,878 $ 137Police DU $ 369 737 $ $ Sheriff Contract 903 503 $ 523 $ Fire DU $ 231 353 $ 150 $ $ Fire District 272 418 $ 637 $ Streets/Signals DU $ 8,095 1,867 $ 210 $ $ 1,129 $ 2,753 Total Residential - Multi-Family $ 13,000 9,008 $ 4,760 $ 1,591 $ 8,401 $ 400 $ 7,320 $ 2,867 $

CITY OF COVINA COMPARISON AGENCIES
NBS - Local Government Solutions

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CITY OF COVINA COMPARISON AGENCIES
Commercial
Park Land and Improvements KSF n/a n/a $ 64 620 $ 150 $ $ 840Recreation Facilities KSF n/a n/aPublic Buildings (Incl Libraries) KSF $ 859 192 $ $ 70Police KSF $ 1,983 177 $ $ Sheriff Contract 260 370 $ 280 $ Fire KSF $ 498 85 $ 200 $ $ Fire District 1,170 350 $ 340 $ Streets/Signals KSF $ 33,047 5,799 $ 1,140 $ $ 10,393 3,216 $ Total Commercial $ 36,387 6,253 $ 1,340 $ 620 $ 4,000 $ 150 $ 11,823 $ 1,530 $ Office Park Land and Improvements KSF n/a n/a $ 64 620 $ 150 $ $ 840Recreation Facilities KSF n/a n/aPublic Buildings (Incl Libraries) KSF $ 627 255 $ $ 70Police KSF $ 160 237 $ $ Sheriff Contract 260 370 $ 280 $ Fire KSF $ 178 113 $ 200 $ $ Fire District 1,170 350 $ 340 $ Streets/Signals KSF $ 16,624 5,116 $ 690 $ $ 3,216 $ 3,048 Total Office $ 17,589 5,721 $ 890 $ 620 $ 4,000 $ 150 $ 4,478 $ 1,530 $ Industrial Park Land and Improvements KSF n/a n/a $ 32 620 $ 150 $ $ 840Recreation Facilities KSF n/a n/aPublic Buildings (Incl Libraries) KSF $ 228 128 $ $ 70Police KSF $ 83 118 $ $ Sheriff Contract 260 50 $ 280 $ Fire KSF $ 124 57 $ 200 $ $ Fire District 1,170 19 $ 340 $ Streets/Signals KSF $ 5,927 1,870 $ 200 $ $ 1,305 $ 1,365 Total Industrial $ 6,362 2,173 $ 400 $ 620 $ 1,406 $ 150 $ 2,795 $ 1,530 $ Notes:
1 DU = dwelling unit; KSF = 1,000 gross sq ft of building area2 Covina existing impact fees adopted in 20053 Proposed impact fees from NBS 2023 Impact Fee Study; proposed single-family residential impact fees based on the 1,200-1,900 square foot fee category; proposed multi-family residential impact fees based on the 600-800 square foot fee category 4 Claremont impact fees effective August 15, 20225 Glendora impact fees effective July 1, 20226 Monterey Park impact fees effective July 1, 20227 San Dimas impact fees effective July 1, 20228 San Gabriel impact fees effective August 1, 2018; the San Gabriel non-residential impact fees for streets and signals depend on trip generation rates; this table uses trip generation rates from the Institute of Transportation Engineers manual, Trip Generation , 10th Ed., as follows (commercial - 37.75 ADT per KSF (Shopping Center); Office - 11.07 ADT per KSF (Office Park); Industrial - 4.97 ADT per KSF ( Gen. Lt. Industrial) 8 West Covina impact fees effective July 1, 2019
NBS - Local Government Solutions

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APPENDIX A
City of Covina 2023 Impact Fee Study - Fee Comparison
CLAREMONT 4 GLENDORA 5 MONTEREY PARK 6 SAN DIMAS 7 SAN GABRIEL 8 WEST COVINA 9 Consumer Price Index (CPI) None No response None
Construction Cost Index published by Engineering News Record Construction Cost Index published by Engineering News Record Approximately 2013 No Study on file No response Study in progress No Study performed since fees were enacted.
2015
Fire and Libraries
Fire provided by LA County Fire District
No response
County provides Police, Fire, and Libraries
None County Library
No official policy but Council can waive fees at their discretion None No response None None
Reduction or Waiver for affordable housing units that are deed restricted to verylow income and low income households Does the City's have a policy regarding waiver or reduction of impact fees for affordable housing or other types of development?

SURVEY QUESTION

CITY OF COVINA COMPARISON AGENCIES
Are the City's impact fees escalated annually by CPI, ENR or other index?When was the City's last comprehensive impact fee study completed?Which of the City's services, if any, are provided by contract or special district? NBS - Local Government Solutions

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Covina City CouncilMarch 19, 2024

Covina City Council
March 19, 2024